Wireless USB market shake-out prompts merger of Staccato and Artimi

Staccato Communications, which designs chips for the emerging wireless USB standard, has absorbed Artimi, another wUSB chip and software developer.

Marty Colombatto will remain CEO of Staccato, and Andrew Vought, CEO of Artimi, will become COO.

Wireless USB is a wire-free alternative to the ubiquitous USB cable. But there have been difficulties with establishing global radio standards, and initial implementations have suffered from poor data-rates, excessive power consumption and high costs that have stalled uptake.

The merger comes amongst uncertainty about the viability of the wUSB market, which observers believe has absorbed between $300m and $500m in funding but has yet to see significant revenue.

Earlier this month Intel ended its efforts to build a wUSB business, and WiQuest, another wUSB start-up, closed its door for lack of funding. In September Focus Enhancements, which provides the ultra-wideband technology (UWB) that wUSB relies upon, filed for Chapter 11, US bankruptcy protection

Staccato used its merger with Artimi, which has an R&D centre in Cambridge, England, to announce it has raised a further $20m of funding from a syndicate of 11 existing investors in Staccato or Artimi.

Marty Colombatto, chief executive officer of Staccato Communications, told Engineering and Technology in September that his company had received $77 million of investment in three rounds, plus undisclosed strategic support from partners. He predicted it would take between $75 million and $100 million to get a chip ready for volume production.

Artimi raised $14 million of venture capital in 2004, $26.5million in December 2006, and a further $5 million in March 2007. Artimi replaced its CEO in March 2008, partly in order to raise funds.

The merged company, which has absorbed at least $142.5 million, will use the new money to bring the best chips and software from the merged companies to market.

”The decision was easy to provide our strategic and financial support to this merger of complementary UWB companies,” said Vinod Khosla, founder of Khosla Ventures. “With a strong syndicate of investors, as well as the best-in-class hardware and software that the two companies bring, the industry will have a well-funded supplier with all the necessary elements to drive a high-volume market.”

The company will combine the advantages of Staccato’s 65nm CMOS single-chip implementation of wUSB with Artimi technology that enables wUSB devices to connect to PCs without installing drivers. Artimi also has a portfolio of technologies based on the underlying UWB standard, which will enable the merged company to address other emerging communications standards, such as high-speed Bluetooth.

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