VC Support Lacking For WiMax, Says Report

LONDON — Venture capital support for WiMax startups, despite reaching $170 million, has been underwhelming compared with the support that was given to the IEEE.802.11 wireless LAN, according to a Light Reading report that cites an Unstrung Insider report.

The report argued that seven startup 802.16 chipset developers had, by January 2006, raised $170 million. It also argues that chipsets for fixed WiMax (802.16-2004) and for mobile WiMax (802.16e) require different designs and has effectively forced startups to choose which market they wish to participate in and has diluted the $170 million aggregate investment.

The report argues that the relatively low venture capital investment in surprising. However, the report does not consider the argument that many venture capital firms lost firms backing wireless LAN startups that failed to get to market in time and that generally only a few pioneers succeed with such standards-based deployment cycles.

Instead the report argues that North American venture capitalists consider WiMax to be a big company play against which startups may struggle.