U.K. startup Nujira Ltd. is out of the starting blocks with a $7.75 million first round of funding that it hopes will lead to commercial deals for its power amplifier base-station technology (see Nujira Scores $7.75M).

The Cambridge-based minnow has a headcount of eight (8) and had previously raised a paltry $850,000 in a seed round of funding, announced in November 2003 (see Nujira Scores $850K). This week’s more serious investment was led by 3i Group plc and Amadeus Capital Partners Ltd., and included further investment from original investors Cambridge Angels, Cambridge Capital Group, and Cambridge Gateway Fund. [Ed. note: Have you nothing that hasn't got quite so much Cambridge in it, then?]

So why the sudden interest in this unproven market player?

Before taking a look at Nujira’s offering, it’s worth outlining the size of the problem Nujira is attempting to overcome. Power amplifiers are estimated to be the single biggest cost component of any cellular base station, at around €1,300 ($1,586) each. An average 3G base station uses approximately six power amplifiers.

Power amplifier efficiency is defined in terms of the power-in/power-out ratio. For example, if you put 1 kilowatt of electricity into the amplifier and get 100 watts out, you have an efficiency of 10 percent. The remaining 900 watts would be lost as heat, which is why base stations need cooling fans and sometimes air conditioning.

According to Tim Haynes, CEO of Nujira, the average efficiency of a wideband CDMA (W-CDMA) power amp is between 12 and 15 percent. “Really you need to get to 35 percent, because by then you reduce the heat dissipation to an efficiently lower level to be able to redesign the base station so that you can start removing fan systems, start cutting down on backup systems and power supply.”

Nujira claims it has developed a technique, which it calls High-Accuracy Tracking (HAT), that can boost efficiency to 35 percent and beyond. This HAT trick is based on varying the voltage supply on the power amplifier transistors in perfect synchronicity with the power level of the incoming radio wave, which ensures that the transistor can make full use of the available voltage supply at every instant in time, rather than only when maximum power is being delivered. The technique supposedly produces very high efficiency (see Nujira Boosts Basestations and Nujira Demos Power Amp).

“That really is what we fundamentally cracked: a technique and architecture to build a very efficient, very fast, power supply modulator.”

Haynes argues that by increasing the efficiency of the power amplifier, the entire cost of base stations could potentially fall. “In an industry where cost is the big issue, infrastructure vendors are very much focused on cost reduction, component rationalization, and pressure on suppliers. But there is only a certain amount you can do in that direction. Our view was that the next level in terms of optimization of the cost of base stations would be in the subsystem redesign. By optimizing subsystems you can actually reduce the whole cost of the system. That’s why we really focused on solving the PA system -- it’s the one system in a base station that consumes a huge amount of power.”

Nujira is competing against the likes of Andrew Corp. (Nasdaq: ANDW) and Powerwave Technologies Inc. (Nasdaq: PWAV) in the battle for base-station vendor customers, as well as the in-house development divisions of such major players as Ericsson AB (Nasdaq: ERICY), Lucent Technologies Inc. (NYSE: LU), and Nokia Corp. (NYSE: NOK).

“We are shipping evaluation systems now,” says Haynes. “They will be in trial very shortly. In terms of production, we expect the modulators to be in production in about 12 months time. It’s too early to talk about customers, but we have vendors signed up to the evaluation systems... We’ve had interest from most of the major worldwide OEMs.”

Haynes adds that the company intends to ramp up staff to “about 35 people in the next 12 to 18 months,” and that another round of funding is likely to happen before the end of 2006. Although Nujira is only focused on the W-CDMA infrastructure market at present, the company is keeping a close eye on the CDMA2000 and WiMax sectors.

Analysts certainly believe Nujira is on the right track. “Power amp efficiency is lamentable,” wrote Gabriel Brown in an Unstrung Insider report last year (see Insider: Cutting Cost of 3G). “An opportunity for innovation exists.”

— Justin Springham, Senior Editor, Europe, Unstrung