News

PacketVideo Pockets Big Bucks from Tech Firms

• By John K. Waters
• March 26, 2001

The economy may be in a downturn, but at least one startup is bucking the trend. Wireless multi-media company PacketVideo got a big nod from some industry heavyweights this week in the form of $90 million in funding. Investors in the privately held developer of software to streamline video and audio content over the Internet included Intel, Motorola, Qualcomm, GE, Sun Microsystems, and Texas Instruments.

Since the San Diego-based company was formed in July 1998, it has raised $145 million, a company spokesperson said. The latest investment alone ranks among the largest private technology-financing deals this year.

Does this funding frenzy mark PacketVideo as a company to watch? The CEO sure thinks so. "Our ability to 'beat the odds' by raising significant funds during poor market conditions is a testament to the quality of our technology, our people, our partners, and the tremendous market opportunity we face," said James Carol, chief executive officer and co-founder of PacketVideo. "This new funding will help to propel us into 2001 and beyond and allow us to continue to execute on our strategy."

Whether PacketVideo is the company to watch remains to be seen, but this kind of support from such heavy hitters certainly should put its technology on everyone's radar. The company makes multimedia playback software for portable wireless devices. Its MPEG-4 compliant software enables the delivery, management, and viewing of video, audio, and multimedia applications over current wireless networks to mobile devices, such as SmartPhones, PDAs, and laptops.

According to Anjeanette Rettig, PacketVideo's VP of corporate communications, the attention the company's technology is getting lets it be selective about investors. "A lot of the investors we have are also partners or customers of the company," Rettig said. "We look at these investment relationships on a much more strategic level that just the investments themselves."

PacketVideo is working with such wireless semiconductor providers as ARM, Intel, Lucent Technologies, QUALCOMM, Texas Instruments, and Zucotto Wireless. The company recently announced that its PVPlayer decoding software will ship with Mitsubishi Electric's new Trium Mondo, one of the world's first integrated GPRS/GSM mobile phone/PDA devices. PacketVideo's software also operates on laptops and on Microsoft Pocket PC devices, including the Compaq iPAQ, Casio's CASSIOPEIA, and the Hewlett Packard Jornada.

Rettig says that the company's primary competitors are Real Networks, Microsoft and Apple, all of which are already making streaming multimedia software for wired networks.

The company filed for a $64 million initial public offering of stock in March 2000, at the peak of Wall Street's passion for tech-related IPOs. But the company withdrew the offering in late April, because of "unfavorable market conditions." The funds from this round of financing will be used to further PacketVideo's growth, provide working capital, fund research and development, and support additional resources for engineering, sales, and marketing.