Irvine-based WiSpry Inc., a startup designer of chips for wireless phones, has raised $13.5 million in a second round of venture financing.
The funding brings WiSpry’s total raised to $22 million, including a venture round last year and seed money after the company’s 2002 start.
“We had very strong interest,” Chief Executive Jeff Hilbert said. “Arguably, we could have ended up taking more money.”
L Capital Partners, a New York-based venture firm that invests in technology and healthcare companies, led the latest investment.
The firm “is an investor that looks for technology that can have the potential to make a big difference in a market,” Hilbert said.
Most of WiSpry’s investors from its first venture round in early 2005 also contributed this time around. They include American River Ventures of Roseville, San Francisco’s Blueprint Ventures, Hotung Capital Management Inc. in San Jose, San Diego’s Shepherd Ventures and Tech Coast Angels, a group of Southland investors.
Hilbert declined to say what WiSpry was valued at in the round but said “there was an increase in valuation.”
The company plans to use the money to develop its initial products and get them to potential customers for sampling, he said.
WiSpry, which employs 24 people, plans to hire more in sales and marketing, Hilbert said.
“I would expect we will see very substantial growth, but we will try to keep our head count down to a minimum,” he said.
The company is trying to solve a problem for cell phone makers: Stuffing more bells and whistles into do-it-all devices while meeting demand for longer-lasting batteries in smaller and cheaper phones.
“The trends within the wireless market are putting more functions into the device, like Internet access, broadcast TV, music, as well as having phones work across multiple frequencies across the world,” Hilbert said. “Consumer satisfaction is key in this market.”
WiSpry takes micro-electro-mechanical systems,microscopic machines that are thousandths of an inch in size,and puts them on chips that go into phones.
The chips switch back and forth from different radio frequencies to carry out multiple tasks.
“By making pieces of a circuit move or reconfigure, it duplicates the function of four or five different things,” Hilbert said.
The chips could cut down on the cost of making phones and how much battery power they use.
WiSpry is looking to get its chips into the hands of top phone makers,Nokia Corp., Motorola Inc., Sony Ericsson Mobile Communications AB and Samsung Corp.
It also wants to land them with bigger chipmakers that sell to phone makers, including potential rivals RF Micro Devices Inc. of North Carolina and Massachusetts’ Skyworks Solutions Inc., which has operations in Irvine.
“We will basically move initial samples out to customers so people can sample the product,” Hilbert said. “Based on those programs, we will move into the production process.”
WiSpry has no plans to raise more money now, though “it would be fair to say that we could find ourselves needing to raise another round,” Hilbert said.
The company was formed four years ago out of the wireless business of Austin, Texas-based Coventor Inc.
Hilbert, who managed the Coventor division out of North Carolina, asked the company’s directors to split off the business.
WiSpry could look to land its chips in portable computers, game controllers and other wireless devices, according to Hilbert.
“Nothing’s off the table,” he said. “The company just needs to keep its focus in its target market, cell phones, and getting the next wave of sample product out.”
