Not long ago, IDTechEx assessed that active (with battery) RFID is 20% of the RFID market by value but attracting 24% of the investment as it advances to become 26% of the RFID market in 2016. Recently, the investment community has taken even more interest in active RFID. Of 27 recent fund raisings by RFID companies, 37% of the companies involved are in active RFID. 22% are in the particularly popular active RFID sector called Real Time Locating Systems RTLS. Recent acquisitions also favour active RFID companies. Indeed the largest exit, for hundreds of millions of dollars, was a company selling active RFID systems - Savi Technology sold to Lockheed Martin this year.
The following examples of recent fund raising by RFID businesses reflect the fact that the number of companies raising money is sharply increasing.
Examples of fundraising in 2005/6 by 27 RFID businesses
|EXAMPLE OF FUND RAISING US$ MILLION
|PRIMARY OPERATIONAL SECTOR IN RFID
|Existing investors Cambridge Angels, Cambridge Capital Group
|Series B. Greylock Partners, Matrix Partners etc. Earlier $6 million was debt financing from Hercules Technology Growth Capital
|Series B new investors Pfizer Strategic Investments group, Bethesda partners. Existing investors IDG Ventures, North Bridge Venture Partners, Pilot House Ventures.
|Software and services
|10 (total 18)
Existing investors plus Investec
|Existing investors Trencor and Carlyle Group
|Systems integration and facilities management
|South Africa - moved to Canada
|Charles River, North Bridge
|Bessemer, Venrock, Red Rock, SAP
|Draper Richards, ONSET, Blacksmith Capital
|Vertex, Star, Stage One
|QuestMark Partners, Intel Capital
|Healthcare systems RTLS
|New and existing investors. Cisco Systems, Nicholas Negroponte, Tudor Group and affiliated funds, Exxel Group, Inventec Appliances Corp., Morningside Technology Ventures, Top Line Capital
|Software and hardware
|26.5 (total 78)
|New and existing investors
|Software and hardware
|Japan - expanded into US
|France (moved HQ to US)
|Development capital led by JP Morgan Partners and including Cazenove Private Equity.
|Hardware and systems
|Series B Existing investors Woodside Fund, Alloy ventures, Selby Venture Partners and one new one. Led by Morgenthaler Ventures
|Active and passive RFID systems
|Buyout led by Partech International and Canaan Partners
|Smart shelves, readers
|Industrial active RFID systems
|Australia - moved to US
|Second round. Mainly existing investors
|Active RFID chip design (Parasitic WiFi RTLS)
|Series B. Existing and new investors
|Active RFID RTLS systems
|Truth Software/ True Demand
|Mayfield, Bay Partners
|Nexit, 3M, Finnish Industry Investment, Sampo Group, Finnish Funding Agency TEKES etc
|Next Stage, Zon, Ben Franklin
RTLS = Real Time Locating Systems
Source: IDTechEx www.idtechex.com
Reflecting this trend, IDTechEx will thoroughly cover the different active RFID markets in its conference RFID Smart Labels USA 2007 Boston February 21-22 2007 www.smartlabelsusa.com . It will be possible for small companies to raise money at the RFID Investment Summit on February 20. There will be presentations wholly or partly on active RFID from the National Information Society Agency, Korea, Lyngsoe Systems, Denmark, Mark IV, Canada and, from the USA, Boeing Integrated Defense Systems, the US Department of Defense, United States Postal Service (USPS), Visible Assets, and Infratab. They will be scoping the big orders to come. Coverage includes postal, food industry, defense, road transport and newly created markets such as Ubiquitous Sensor Networks USN, because the opportunities are very broad based.
Passive RFID remains very important. Of the recent successful fund raisings by RFID companies, 27% were primarily in software and software-based services, usually related to passive RFID systems, proof of authenticity via RFID being a repeated example. The other investments in passive RFID companies concerned hardware and mainly systems supply or systems integration.
For more read RFID Profit, Acquisition and Investment Strategy.