VCs Debate Wi-Fis Future
Venture capitalists claim the wireless market is significantly overfunded, saying roughly $2.5 billion has been invested in the sector.SAN JOSE, Calif.The wireless market is significantly overfunded, venture capitalists said last week, portending a shakeout. Still, they couldnt help but list a number of new sectors that will need additional capital. If nothing else, the panel at the WiFi Planet show here Friday underscored the perception of wireless as a "hot technology." Roughly $2.5 billion has been invested in the sector, which has produced only $2 billion or so in revenue to date, according to Neeraj Bharadwaj, a general partner with Apax Partners, in New York.
Approximately $160 million has been invested in the last quarter alone, according to Rajeev Chand, a senior equity research analyst for wireless technologies at Rutberg & Co., in San Francisco, or about 15 percent of all of the capital invested during the quarter. "It doesnt look like this is decreasing," Chand said. "The sector is overfunded, and we are concerned. With that said, despite the overfunding, there is an opportunity."