European Wireless Internet The Alta Berkeley Experience Barun

European Wireless Internet: The Alta Berkeley Experience Barun Dutta Alta Berkeley Venture Partners London-Geneva bd@alta-berkeley. com © ALTA BERKELEY VENTURE PARTNERS 7/200

Backgrounder: Swinging for the Fence • One of the original early stage European VC’s since 1982 London and Geneva • Founding members of both EVCA and BVCA • All Investing GP’s are Technologists, Entrepreneurs and Operational Executives in Past • First Venture Investor in Info-tech, Telecoms and Bioinformatics • 55 investments in the last 10 years with over 12 Euro IPO’s on 6 different exchanges and 8 on Nasdaq • Thus experience makes you a cynic! • Speaker (Yours Truly): Hardcore Network research guy, senior strategic and technical management experience but have had two start-up successes and was Angel investor before being a VC on both sides of the Atlantic A B V P © LTA ERKELEY ENTURE ARTNERS 7/200

Initiative Investing in European Wireless: Past and Present • Technical Background/Experience and Gray Hair driven • No Statistical Multiplexing in Whole Sector – Small number of Companies, No strategy by CNN/CNBC • Serious Educated Fortune Telling! – Identified in 1997 that First generation: Wireless Internet was Big – Asked ourselves what we would use and want • Conclusions – Smart phones/PDA’s and their users have certain characteristics: • • personal timely have small screens and bad keyboards mobile and roaming © ALTA BERKELEY VENTURE PARTNERS 7/200

Case Study I: Personal Device • Personal Device Implies => Mobile Location • Look for High Accuracy Device Location Infrastructure • Look for non traditional techniques but creative people – Identified and funded Cambridge (U. K. ) Positioning Systems (CPS) Bunch of Radio-astronomers! • What have they accomplished – Only technology which does not need change to handset hardware: No cost increase (Non-GPS), works in urban valleys – Only technology to have met US FCC Phase II trials - 67% < 50 m and 99% <125 m in current GSM – Better than 5 m accuracy in UMTS – 11 Trials worldwide - TIM, Voicestream, Vodafone, etc. – Licensing deals with Ericsson, Siemens, Alcatel, Nortel, Lucent, Infineon, Motorola – Control, enable and tax all Location based services - Premium Call – Global Opportunity and great global team A B V P © LTA ERKELEY ENTURE ARTNERS 7/200

• • Case Study II: Timely Data Implies => Alerting People with Data Look for Exceptional Event Detection Technology Look for non traditional techniques but creative people – Identified and funded Categoric Software [U. K. and US] – Bunch of guys from the shipping business What have they accomplished – Only technology which sits on Corporate Network and looks for exceptional events in databases, text repositories, call centers, ERP and responds and take action based on it. Thresholds can be set by user and not DBA or Sys-Admin. Mobile/Web, IVR, pre-programmed in and out – Large number of customers and resellers both OEM and direct – Being integrated into major ERP infrastructure – Mobile operators like Telia are making it available as a service corporations - First true corporate mobile data application – Operator Revenue Driver – Nokia Ventures, T-Ventures as investors pushing for handset integration © ALTA BERKELEY VENTURE PARTNERS 7/200 – Global Opportunity with global team

Case Study IV: Mobile and Roaming • • Mobile and Roaming => True Multi-band Phones (Tri-band more) Look for technology or bottleneck: Why only one phone on the market? – Bottleneck is in filter technology and its impact on time to market • Look for non traditional techniques but creative people – Seeded SAWCOM to address these two issues • What have they accomplished – Have demonstrated that a fab-less enterprise with specific proprietary software can design high efficiency SAW filters and duplexers with far better performance and time to market than anything currently available – Have built prototypes of filters and delivered to handset manufactures for qualification – Tremendous interest from handset integrators for components – Currently raising first round financing to execute on demand – Most likely will enable multi-band phone with low power consumption © ALTA BERKELEY VENTURE PARTNERS 7/200

Case Study IV: Small screens and Bad keyboards • Small Screens and Bad Keyboards => Simple Transactions and Needs Provider • Look for Scalable Technology based Service Provider for Wireless ISP/Portal • Look for non traditional techniques but creative people – Identified the iobox team in Finland • What have they accomplished – First and largest pan-European Wireless Portal/Service Provider – Built true multi-national team with presence in five European Countries – In 18 months built 1. 2 mil users, became benchmark of the industry – Entrepreneurs of the Highest Caliber on a Global Scale – Largest trade sale ever done in Finland – Fantastic team balanced in both technology and organization/marketing – Acquisition by Telefonica enables access to the fastest growing market – Leading convergence of Mobile and Broadband © ALTA BERKELEY VENTURE PARTNERS 7/200

Initiative Investing: Some lessons • Your startup worked because you saw an opening in the market…… – …… one that a large company was likely better suited to serve if they could have. • How do you make sure you don’t become obsolete someday? ? • Great Opportunities exist in Europe but you have seek them out “… we want to be #1 or #2 in every • You Have to be #1 or #2 - Winner take all system area that we – Each example is the #1 leader in what it does participate in…” • Strategy by CNN/CNBC can be counter-productive - Jack Welch • Wireless data is Not like the Internet (General Electric) • First Generation is Over • Next Generation might be a European Non-event • Building true pan-European Business is Not for the Faint Hearted A B V P © LTA ERKELEY ENTURE ARTNERS 7/200

The Future: 3 G • UMTS is the largest tax on the consumer since VAT – 70% of Broadband Auction Winners in US ‘ 94 Auction are dead • There are few Mobile Data business models – Consumer focus of UMTS is a non starter • Additional Spectrum will most likely be used to support additional voice customers • UMTS auctions might have killed Europe’s lead in mobile • NTT-Docomo is not a good business example for Europe • Dominant Operators will continue to win • Wireless Opportunities are not in 3 G or as stated by CNN/CNBC - Great Entrepreneurs will deliver it! – Let’s meet next year to see where we are with a few more case studies A B V © LTA ERKELEY ENTURE PARTNERS 7/200