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NewsGlobe: Financial
Ruckus Wireless Raises $9M
WiFi Home Networking Set for Growth
by Ouida Taaffe
Ruckus Wireless, the California based provider of wireless
multimedia systems for the home, has announced second
round funding of US$9 m. This brings the total raised by
Ruckus, which was founded as Video54 in June last year, to
US$14 m. The investors in the second round are Sutter Hill
Ventures, which is US-based, and Investor Growth Capital, the
venture capital arm of Investor AB of Sweden. The first round
investors were Sequoia Capital (which also provided seed
funding) and WK Technology Fund, which is based in Taiwan.
These also participated in the second round. The
shareholding structure of Ruckus has not been disclosed.
“The equity market has improved a lot since Ruckus was
founded 15 months ago,” says CEO Selina Lo of the funding
situation. “At that point, people were a little shy of investing
in consumer networks because they felt they were
commoditised. The products have done very well and now
potential investors are very interested.”
Lo says that an IPO is “absolutely” on the roadmap for
Ruckus, though no definite plans have been detailed. Ruckus
sells its products (again, neither actual revenues nor
projections have been disclosed) by licensing them to players
such as Netgear, a provider of networking and internet
connectivity solutions, or by going through service providers.
A first service provider deal was recently announced with
PCCW, though other go-to-market deals with providers in the
US, Asia and Europe are due soon. In terms of demand, Lo
says that “in general” the service provider triple play market
is much more advanced in Europe and Asia. Markets that
stand out as strong are Hong Kong and Italy “where it is
much easier to just turn up the bandwidth”.
There have been horror stories in the US of the difficulties –
and costs – that some providers have encountered in trying to
cable up home networks. The Ruckus solution overcomes
this ‘last 25 metre’ problem by dispensing with cabling. It
aims, instead, to optimise the performance of WiFi networks
using smart antennae schemes, ‘sophisticated traffic
inspection’ and ‘reliable multicast software’. The boxes used
are, Lo says, plug and play. “The only thing the consumer
has to configure is the encryption i.e. the password,” she
says.
As things stand, the recommended retail price of the Ruckus
MF2900 router and the Ruckus MF2501 adapter are
US$169.00 and US$129.00 respectively. (The boxes are
manufactured in China and Taiwan.) Lo anticipates that the
service provider would fund the initial cost of the kit. “It
becomes a platform on which they can offer more and more
services,” she says of the rationale. “Fixed operators, for
example, see WiFi phones as a key play in capturing minutes
that would otherwise be lost to mobile. Mobile operators are
interested in WiFi as a means of getting more subscribers.”
The basic technology is, Lo says, both WiFi and WiMAX
compliant, though she expects WiFi to remain dominant in
home networking, partly because of the large installed base.
The Ruckus solution currently only supports data services, but
voice services should be launched in Q1 next year. Lo insists
that though the barriers to entry in the home networking
business are traditionally low – hence price erosion on the
retail side – Ruckus is well protected in terms of
patents. “What we have to compete against now is the
perception that WiFi can’t do it [as well as cable],” she says.
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