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Networking - Monday, November 28, 2005

2Wire - Profile

2Wire = Linkys + Tivo + Vonage + Telco Love

HQ: San Jose, CA

Founded: July 1998

Management: Brian Hinman is President & CEO. He was co-founder and CEO of Polycom (NASDAQ: PLCM) which makes cool teleconferencing equipment. He was also co-founder of PictureTel Corporation (NASDAQ: PCTL) at the age of 22.

Investors: The company's last round was in October 2001, totaling $61M, with co-lead investors Technology Crossover Ventures (TCV) and Oak Investment Partners. 2Wire has raised a total of $144M. Other investors include Pilgrim Baxter & Associates and Shell Internet Ventures, Accel Partners, DCM (Doll Capital Management), the INVESCO Private Capital Group, Meritech Capital, and Venrock Associates.

Business Model: The company just announced that 4 months after shipping
its 3-millionth residential gateway, it has shipped its 4-millionth unit. 2Wire's HomePortal residential gateways are sold by telcos to residential customers. The DSL boxes enable home networking, including wireless Internet access
and services such as parental controls, firewall, remote access, remote diagnostic and automatic upgrading. The company has also launched a set-top box. Telco distributors include: AT&T (formerly SBC), BT, Verizon, and TELMEX. 2Wire has pushed sales almost 900% in the past three years.

2Wire's Set-top Box With 250 GB Hard Disk Drive Is Going After Tivo

Competitors: Linksys, Tivo, Dlink, Netgear.

Dirt: We think 2Wire's mastermind Brian Hinman is the right man at the right time to make home networking easy. With all his multimedia experience, 2Wire has big ambitions to not just fix a problem here and a problem there, but to take the whole home networking category. 2Wire has big mo' in voice and is turning its attention to media and the launch of its media hub has been very well received. The company will also be doing VoIP and wireless media networking. Perhaps because the company sells through telcos and not via Bestbuy as Tivo and Linkys do, it has not gotten much public attention. 2Wire is bad-ass and it's time people realized it.