Skip to Content

Networking Stays Connected

Communications companies buck the fourth-quarter slide.
February 24, 2009

In the fourth quarter of 2008, venture investment in the United States plummeted by more than 25 percent. Even energy and utility companies, which saw enormous growth in investment in 2008, suffered their first quarterly drop-off of the year.

But one subsector of the information technology industry, which VentureWire calls communications and networking, enjoyed an unexpected surge. Indeed, it was the only sector to see an increase in funding over both the previous quarter and the fourth quarter of 2007.

Much of that jump was due to two startups that received $100 million each. One of them, Pocket Communications, offers a contractless, flat-rate, unlimited-­calling cell-phone plan. The other, Open Range, plans to bring wireless broadband to rural areas but is not yet disclosing any details about its tech­nology. But a number of other companies with innovative technologies also received significant funding.

Hard Winter
Quarterly funding relative to Q4 ‘07

PureWave’s wireless broadband transceiver uses multiple antennas to increase its data ­capacity sixfold. Beams from separate antennas cancel each other out only in certain directions, so transmissions can be aimed at particular users. A transmitter–or two transmitters near each other–can thus use the same transmission frequencies for multiple users, without fear of interference. The device uses software to switch between transmission protocols, so it should be compatible with several standards for wireless broadband.

Product: Wireless-broadband base stations

CEO: Gideon Ben-Efraim

Location: Mountain View, CA

Funders: Leapfrog Ventures, ATA Ventures, Allegis Capital, Benhamou Global Ventures

Funding: $20 million


Awarepoint has a novel twist on the RFID systems that many hospitals use to track equipment. Its tag readers plug into ordinary wall sockets, so there’s no need to string new cables throughout the hospital. The readers then organize themselves into a wireless mesh network, monitoring each other’s signal strength and calculating the most efficient way to route information. If one reader malfunctions or is obstructed, the others route around it. The readers generate less than a milliwatt of power each, so they don’t interfere with hospital equipment, as some systems do.

Product: RFID tracking system for hospitals

CEO: Jason Howe

Location: San Diego, CA

Funders: Cardinal Partners, Avalon Ventures, Venrock

Funding: $19.3 million


Computers, which process data electronically, use silicon circuits; optical networks, which transmit data on beams of light, use lasers and receivers made from more exotic and expensive semiconductors. The ­ability to make optical components from silicon would lower manufacturing costs and let computers process optical data more quickly. Luxtera was the first company to bring silicon optics to market, with a data cable that went on sale last year. At trade shows, it has begun demonstrating a prototype cable for video systems, likely to be its next product.

Product: Silicon-based optical equipment

CEO: Greg Young

Location: Carlsbad, CA

Funders: Advanced Equities Financial, August Capital, New Enterprise Associates, Sevin Rosen Funds

Funding: $72.9 million


Keep Reading

Most Popular

It’s time to retire the term “user”

The proliferation of AI means we need a new word.

The problem with plug-in hybrids? Their drivers.

Plug-in hybrids are often sold as a transition to EVs, but new data from Europe shows we’re still underestimating the emissions they produce.

Sam Altman says helpful agents are poised to become AI’s killer function

Open AI’s CEO says we won’t need new hardware or lots more training data to get there.

An AI startup made a hyperrealistic deepfake of me that’s so good it’s scary

Synthesia's new technology is impressive but raises big questions about a world where we increasingly can’t tell what’s real.

Stay connected

Illustration by Rose Wong

Get the latest updates from
MIT Technology Review

Discover special offers, top stories, upcoming events, and more.

Thank you for submitting your email!

Explore more newsletters

It looks like something went wrong.

We’re having trouble saving your preferences. Try refreshing this page and updating them one more time. If you continue to get this message, reach out to us at with a list of newsletters you’d like to receive.