changes its mind, nets $10 million investment
June 26, 2005
By Aliza Earnshaw
Little more than a year after saying it probably wouldn't seek
new funding, VeriWave Inc. has closed a $10 million Series B round
with a new lead investor.
Woodside Fund of Redwood Shores, Calif., last year declined to
participate in Beaverton-based VeriWave's first professional round.
What attracted Woodside to VeriWave was "that WiFi was exploding,"
said Rick Shriner, a Woodside venture partner.
VeriWave, founded in August 2002, makes test equipment for wireless
When VeriWave contacted Woodside again, "they'd put together
a really top-notch management team, led by [CEO] Chris DeMonico,"
said Shriner. "We were able to get good feedback from customers
about VeriWave, which we didn't have a year ago."
Also participating were previous investors US Venture Partners
of Menlo Park, Calif., and TL Ventures of Philadelphia.
The latest infusion of cash has helped VeriWave develop a new generation
of products. A company official had said last year that the Series
A round was likely to be VeriWave's last.
The new products, "an extension of our WiFi testing equipment,"
will be on the market later this year. They are now being used by
beta customers, said DeMonico.
WiFi refers to a standard for wireless data transmission otherwise
known as 802.11.
The company has grown since raising something under $10 million
in February 2004, but DeMonico won't say how many employees have
joined the 20 who were then working at VeriWave. He also declined
to reveal revenue.
VeriWave customers include Cisco Systems Inc., Aruba Wireless Networks
Inc. and Colubris Networks Inc. Other companies that DeMonico says
he cannot name also use VeriWave's equipment to test their wireless
Network World magazine recently conducted tests of Voice over Internet
Protocol (VOIP) quality delivered over wireless networks, using
VeriWave's equipment. The magazine mentioned VeriWave in its article
published in January, and that has brought in some new customers,
It was not by accident that VeriWave's equipment was chosen; the
company has been canny about marketing to labs that conduct such
"It would have been hard for Network World to pick a lab that
didn't have our equipment," said DeMonico.
Investing in wireless testing makes more sense than investing in
a wireless device or equipment company, said Shriner.
"When you looked at it, you had the feeling that if you were
investing in a component or device, you were probably behind the
wave of investments, because a lot are already on the way,"
Just as had been the case with Ethernet technology years ago, manufacturers
need testing equipment to tell them how well their wireless networking
products are working.
The situation is complicated by the fact that wireless networks
now must be capable of transmitting not only data, but also voice.
Increasingly, businesses are shifting to VOIP, and away from traditional
Ashish Gupta, a venture partner with Woodside, has joined VeriWave's
board. Shriner is considered to be an "alternate" board
member with Gupta, though he also attends board meetings.
Recently, VeriWave has hired a new vice president of sales, Rob
Johnson, lately of Spirent Communications, and a new vice president
of marketing, Eran Karoly, lately of network testing equipment company
VeriWave co-founder Rick Denker, who was the company's vice president,
is now consulting part time with VeriWave, said DeMonico. Co-founder
Tom Alexander remains as VeriWave's chief technology officer.