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Twisted Pair Channels $9M in Funding

Light Reading
News Analysis
Light Reading
9/29/2006

Seattle-based Twisted Pair Solutions Inc. said Friday it has landed a $9 million funding round to help widen sales of its IP “group communications” software. (See Twisted Pair Gets $9M.)

An investment group including Ignition Partners and Core Capital Partners led the round. Chart Venture Partners invested as well. Core and Chart get a seat on the Twisted Pair board.

Twisted Pair’s product, called Wide Area Voice Environment (WAVE), is used to allow disparate communications devices -- cell phones, CB radios, smart phones, PCs, and the like -- to communicate on a common IP platform.

Twisted Pair co-founder and CTO Shaun Botha says the software has been embraced by defense agencies and emergency first responders who need to quickly get on the same wavelength to coordinate their activities. “Typically their radio systems are incompatible, so they might have to actually swap radios,” Botha says. (See Safety Dance.)

Botha says the software was used by public safety agencies in New Orleans during hurricane Katrina. The platform is a closed IP network, and does not rely on the public Internet, he says. The software runs on Microsoft Corp. (Nasdaq: MSFT) and Linux servers. (See Katrina & the Waves.)

The company says it holds two patents for the software and is in the application process to receive several more.

Twisted Pair says it will use the new money to broaden its sales, marketing, and partner development efforts, as well as to fund further product development.

Sales and marketing VP René Grossrieder says most of the company’s sales are to defense agencies like the Coast Guard, and to local public safety organizations. Some of the new funding, he says, will be used to expand sales in Twisted Pair's two other markets: public utilities and the financial industry.

The company also has a growing OEM business, Botha and Grossrieder say. For example, it licensed its VOIP software platform to BT Group plc (NYSE: BT; London: BTA) so that the carrier could add a VOIP element to its widely used Integrated Trading System (ITS) for the financial industry. In that context, Twisted Pair's software allows traders and brokers to communicate using VOIP over any PC with a broadband connection.

Botha said his company is currently in discussions with other telephone companies about licensing the software, but declined to elaborate.

Twisted Pair, which launched in 1999, received some angel funding in 2005, and before that relied on personal investments from people close to the company. The company, being private, declines to talk about its revenue. “It’s good,” Botha tells Light Reading. The company says it expects to hit profitability in 2007.

Twisted Pair employs 30 people now, and expects to add 20 more in the near future.

— Mark Sullivan, Reporter, Light Reading

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