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February 15, 2006
VC Euros flowing to RFID startups
We’ve posted about the growing amount of venture money flowing to proven online ventures, now it is time to look at another segment, Radio Frequency Identification (RFID).
We tracked eight investments in the past few months. By our definition, that's a trend.
The eight deals do not include investments in startups that are developing RFID chips made using polymers or semi-conducting plastics such as Printed Systems GmbH, recently funded by Degussa, or PolyIC (its RFID chip is shown here), funded by Siemens and Leonhard Kurz GmbH&Co. KG
The size of the deals tend to be smaller than the online and semiconductor VC investments, but the number of transactions is on the upswing. The finalizing of industry standards and the radical drop in RFID chip price (from $4 to less than 20 cents) has a lot to do with confidence in the sector, say industry insiders.
Tracking uniforms with chips (Image: Tagsys)
Used until very recently RFID tags were mainly used to keep track of dirty laundry, library books, cows, and gas canisters. It is now becoming more sophisticated.
Applications are emerging as public and private organizations see RFID systems as a way to squeeze more costs out of the supply chain, as a better way of toting personal identification around, and as a storage place for e-tickets.
For example, French startup Tagsys says Pfizer is using its RFID technology to battle counterfeiters of its popular Viagra drug
(Does anyone really believe that those spam ads for “discounted” versions of the little blue pill are delivering the real thing?).
Balance Bourbeau, a Canadian vendor truck scales systems used Identec's long range RFID technology to manage timber assets and comply with government reporting requirements.
An editor we once worked for used to say: one’s an event, two’s wait and see, and three’s a trend, so eight deals for Radio Frequency Identification (RFID) startups in eight months is a trend.The following is a quick list of recent transactions
Stockway (FI) – RFID software for developers-enables tracking via Internet – €3M (estimated)
Inside Contactless (FR)– short range RFID chips - €10.9 mln
Identec (AT) - long range RFID hardware for item and asset tracking - €3.4M
Idencom (CH)– RFID component for biometric passports - Swiss business angels- €1M
Safe-ID Solutions (DE) – an RFID systems for biometric passports (Infineon spinoff) -€7M
Tagsys (FR) – short range RFID labels and readers for item tracking -$12.2M.
Datamars (CH) – short range item and livestock tracking - undisclosed amount
RFiT (AT) – RFID software and gear for integrators (Infineon spinoff)– €4M
It looks like investors here think the time is right to fund the suppliers of chips, readers, and software. Notable is the interest in the data management software required to run an RFID application, which says that more of the technology pieces required to implement a real life system are being funded.
Whether or not any of these startups will emerge as a major player depends on the staying power of the VCs and the ambition of the founders. If the recent past is anything to go by, many will end up being tasty tidbits for deep-pocketed trade buyers.
Posted on February 15, 2006 07:06 AM | Posted to Plastic electronics | Venture Capital | Wireless | Permalink
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