$20 million in venture capital adds to upswing
By John Duchemin
Advertiser Staff Writer
Six more Hawai'i technology companies received about $20 million in venture funding in the last quarter of 2002, increasing evidence that the year's end was one of the most successful investment periods for the small Hawai'i technology community.
The confirmed investments in BIvision Systems, Broadband iTV, Inovaware Corp., Iris Wireless, Trex Hawaii and Loea Corp. bring the total known year-end investments to 12 companies and more than $25 million.
Investors said the venture funding, which will let many of the companies expand operations and hire new workers, adds credibility to the state's tech sector, which has long struggled to raise investment capital. With a few multimillion-dollar exceptions, venture investments in Hawai'i companies were few and far between until the recent upswing.
"We think this is a major accomplishment for Hawai'i's tech sector, and for our state," said Jeffrey Au, a partner in venture firm PacifiCap, which invested in each of the six companies. "Over the past year, we have seen a dramatic improvement in both the quality and the quantity of technology opportunities in Hawai'i."
Many of these investments were made under the aegis of Act 221, a state law passed in 2001 that provides non-refundable state tax credits worth 100 percent of the amount invested over a five-year period.
Details about the six newly confirmed investments:
• Broadband iTV, a Honolulu firm that has developed an interactive advertising channel now running on Oceanic Cable, received about $1 million from PacifiCap and other local investors, company chairman Clif Kagawa said.
Kagawa said the company used the money to cover startup costs of its 10-employee company, whose channel lets consumers browse travel, auto and real estate advertisements using their TV remote controls. He said the company, which has signed up advertisers including Aloha Airlines, Nissan and Prudential Locations, is on track to meet the needs of 250,000 users by mid-February.
• BIvision, a San Diego-based software company with its development team in Hawai'i, received between $1 million and $2 million, business development adviser Bassin Karkachi said.
The firm is refining software that helps wireless companies monitor their networks remotely. While BIvision is a recent startup, Karkachi said company president Guy Kalouchko developed the idea over several years while performing consulting work for wireless phone companies.
The company will use some of the money to hire more software experts in Hawai'i — it now has two employees telecommuting from their O'ahu homes — and set up a permanent office here, Karkachi said.
• Inovaware, a Manoa-based billing and service software company with several dozen employees, received an undisclosed amount. Executive vice president Marc Rapoza said the company will use the money to expand into Asia.
• Iris Wireless, a wireless software firm that recently moved its headquarters to Hawai'i, received $9 million in November and an undisclosed follow-on investment later in the year, PacifiCap's Au said.
Company chief executive Peter Rinfret said his firm has designed software that lets text messages pass seamlessly across different wireless communications systems. The company is setting up a research-and-development center here and wants to use Hawai'i as a base for international expansion, RInfret said.
• San Diego-based research firm Trex Enterprises, which has a Hawai'i subsidiary performing millions of dollars' worth of military and government contracts, received an undisclosed amount. The Hawai'i division has developed several communications and biosensor technologies for the government, and company officials hope to "commercialize" them into viable products.
• Loea Corp., a spinoff of Trex Hawaii, received an undisclosed amount. The company has developed a high-bandwidth wireless system, now being used by the University of Hawai'i to transmit data to and from its ocean science labs on Coconut Island in Kane'ohe Bay.
Au said PacifiCap was the lead investor in several of the companies, but joined wealthy local "angel" investors and other venture funds in some of the investments. He declined to give specific details about each of the investments.
PacifiCap is the former firm of Ted Liu, the new director of the state Department of Business, Economic Development and Tourism. Liu, Au and partner Rick Cho formed the company several years ago with a mission of funding Hawai'i and other companies with international prospects.
