LTE Hopeful Runcom Pockets $10M

Israeli mobile WiMax silicon trailblazer Runcom Technologies Ltd. has raised $10 million in Series C funding from TLcom Capital Partners Ltd. to further its current WiMax product development and expand into Long-Term Evolution (LTE) and WiMax femtocells. (See Runcom Raises $10M .)

Founded in 1997, Runcom was one of the first technology companies to develop Orthogonal Frequency Division Multiple Access (OFDMA), the basic building block for both so-called 4G technologies mobile WiMax and LTE, having introduced its OFDMA technology in 2000. (See Runcom Touts Mobile WiMax and The WiMax LeapFrog.)

Since then the company, which has 130 employees, has developed an impressive customer base for its base station and device chipsets, with Alcatel-Lucent (NYSE: ALU), Nokia Corp. (NYSE: NOK), Motorola Inc. (NYSE: MOT), Samsung Corp. , and ZyXEL Communications Corp. among its clients, according to Runcom executive VP Moshe Levinson.

Now the company is looking to branch into new markets, and has sought new funding to aid its growth.

The new cash influx is the company's first fundraising since 2000, when Concord Ventures and SMAC Partners invested in the firm, but doesn't sound like a lot for a company in the overcrowded mobile WiMax chipset market. (See WiMax: Hyped, but not Backed?, Nortel Takes WiMax MIMO, and Alvarion Expands Ecosystem.)

“Runcom is one the pioneers of OFDMA and mobile WiMax and potentially has some valuable IPR [intellectual property rights],” says Gabriel Brown, senior analyst at Heavy Reading. “Maybe they haven’t capitalized on it. They could have raised more money sooner, the question is, why now? And is $10 million enough?”

Runcom's Levinson says, "We are a positive cash flow company… We have raised this money to improve our R&D, our marketing -- nothing more than that," he adds.

Specifically, the money will help fund the company's current LTE product development. (See LTE Focus Puts Pressure on Femtocells and LTE Specs on Track.)

"We are in a good position with LTE because we already decided to develop this solution," says Levinson, who claims Runcom already has LTE products and even LTE customers, though none that can be named publicly as yet.

Runcom is also aiming to capitalize on the growing interest in femtocells too: The company will introduce a commercial WiMax femto product in the first quarter of next year, and also plans to develop LTE femto products. (See 2010: Year of the Femto and Vendors Unite on Femtocell Architecture.)

Runcom's new funding comes as the U.S. wireless broadband market holds its breath over the fate of Sprint Corp. (NYSE: S) and Clearwire LLC (Nasdaq: CLWR)'s proposed nationwide WiMax deal, and digests some new details about Sprint's XOHM service.

The new Light Reading report, "WiMax: What's Working Now," gives the state of play of commercial WiMax deployments worldwide. (See The WiMax State of Play in the USA and Clearwire Has Cash for 'at Least' 12 Months .)

— Michelle Donegan, European Editor, Unstrung

IPobserver 12/5/2012 | 3:33:25 PM
re: LTE Hopeful Runcom Pockets $10M Impressive to be cash flow positive at 130 people. Femtocell is an interesting direction as well.

Still curious about the funding strategy, thouGǪ per my comments in the article.

It costs hundreds of millions of dollars to develop a radio chip for mass-market mobile devices, look at how the 3G silicon market has consolidated down to a big three (TI, Qualcomm, and now STM-NXP-EMP).
Michelle Donegan 12/5/2012 | 3:33:24 PM
re: LTE Hopeful Runcom Pockets $10M Runcom still intends to IPO at some point too, with hopes of raising $30-$40 million. They say it's not a good time to do anything about it now, but it's good to think about.

Is this wishful thinking?
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