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Active RFID Attracts More Big Money

Active RFID Attracts More Big Money

With the launch of an RFID Investment Summit to be held in Boston on Feb 20, Raghu Das, CEO of IDTechEx looks at the recent investor interest in RFID and particularly active RFID and Real Time Locating Systems.

Not long ago, IDTechEx assessed that active (with battery) RFID is 20% of the RFID market by value but attracting 24% of the investment as it advances to become 26% of the RFID market in 2016. Recently, the investment community has taken even more interest in active RFID. Of 27 recent fund raisings by RFID companies, 37% of the companies involved are in active RFID. 22% are in the particularly popular active RFID sector called Real Time Locating Systems RTLS. Recent acquisitions also favour active RFID companies. Indeed the largest exit, for hundreds of millions of dollars, was a company selling active RFID systems - Savi Technology sold to Lockheed Martin this year.
 
The following examples of recent fund raising by RFID businesses reflect the fact that the number of companies raising money is sharply increasing.
 
Examples of fundraising in 2005/6 by 27 RFID businesses
COMPANYEXAMPLE OF FUND RAISING US$ MILLIONCOUNTRYSOURCEPRIMARY OPERATIONAL SECTOR IN RFID
Ubisense3UKExisting investors Cambridge Angels, Cambridge Capital GroupRTLS Systems
OAT Systems6USDebt financingSoftware
OAT Systems12.5USSeries B. Greylock Partners, Matrix Partners etc. Earlier $6 million was debt financing from Hercules Technology Growth CapitalSoftware
InSync Software7.5USSeries AManufacturing software
SupplyScape8USSeries B new investors Pfizer Strategic Investments group, Bethesda partners. Existing investors IDG Ventures, North Bridge Venture Partners, Pilot House Ventures. Software and services
PanGo Networks10 (total 18)USSecond round
Existing investors plus Investec
RTLS Systems
Trenstar10USExisting investors Trencor and Carlyle GroupSystems integration and facilities management
iPICO$C15South Africa - moved to CanadaIPOManufacturing
RFiT Solutions5USPontis, Truffle Systems
Reva Systems10USCharles River, North BridgeSystems
T3Ci9USBessemer, Venrock, Red Rock, SAPSystems software
Blue Vector4USDraper Richards, ONSET, Blacksmith Capital Systems
Axcess2USAmphion InnovationsActive systems
Pinc SolutionsUSSutter HillActive systems
Sandlinks4USVertex, Star, Stage OneActive Systems
RF Code20USQuestMark Partners, Intel CapitalHealthcare systems RTLS
ThingMagic21USNew and existing investors. Cisco Systems, Nicholas Negroponte, Tudor Group and affiliated funds, Exxel Group, Inventec Appliances Corp., Morningside Technology Ventures, Top Line CapitalSoftware and hardware
Impinj26.5 (total 78)USNew and existing investorsSoftware and hardware
Omron30Japan - expanded into USParentManufacturing hardware
Tagsys35France (moved HQ to US)Development capital led by JP Morgan Partners and including Cazenove Private Equity.Hardware and systems
Intelleflex15.5USSeries B Existing investors Woodside Fund, Alloy ventures, Selby Venture Partners and one new one. Led by Morgenthaler VenturesActive and passive RFID systems
Vue TechnologyUSBuyout led by Partech International and Canaan PartnersSmart shelves, readers
Identec Solutions15Austria/ USNew InvestorIndustrial active RFID systems
G2 Microsystems14Australia - moved to USSecond round. Mainly existing investorsActive RFID chip design (Parasitic WiFi RTLS)
Radianse6USSeries B. Existing and new investorsActive RFID RTLS systems
Truth Software/ True Demand 8USMayfield, Bay PartnersSoftware
Ekahau16FinlandNexit, 3M, Finnish Industry Investment, Sampo Group, Finnish Funding Agency TEKES etcRTLS systems
RCD Technology2USNext Stage, Zon, Ben FranklinSoftware
 
RTLS = Real Time Locating Systems
Source: IDTechEx www.idtechex.com External Link
 
Reflecting this trend, IDTechEx will thoroughly cover the different active RFID markets in its conference RFID Smart Labels USA 2007 Boston February 21-22 2007 www.smartlabelsusa.com External Link. It will be possible for small companies to raise money at the RFID Investment Summit External Link on February 20. There will be presentations wholly or partly on active RFID from the National Information Society Agency, Korea, Lyngsoe Systems, Denmark, Mark IV, Canada and, from the USA, Boeing Integrated Defense Systems, the US Department of Defense, United States Postal Service (USPS), Visible Assets, and Infratab. They will be scoping the big orders to come. Coverage includes postal, food industry, defense, road transport and newly created markets such as Ubiquitous Sensor Networks USN, because the opportunities are very broad based.
 
Passive RFID remains very important. Of the recent successful fund raisings by RFID companies, 27% were primarily in software and software-based services, usually related to passive RFID systems, proof of authenticity via RFID being a repeated example. The other investments in passive RFID companies concerned hardware and mainly systems supply or systems integration.
 
For more read RFID Profit, Acquisition and Investment Strategy.