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Startup SyncVoice Raises First $4M for Software Sales

A software company has phoned in some funding.

Costa Mesa-based SyncVoice Communications Inc. said earlier this month it landed $4 million in its first financing round. The company sells software to manage telecommunications networks at businesses.

SyncVoice has more than 250 customers and about $1 million in revenue, said Kerry Shih, founder and chief executive. Sales grew by about 60% last year from 2004 and could double this year, he said.

“We have the traction of a B series company,” Shih said, referring to companies on their second,not first,round of funding.

The money raised is set to go toward sales, he said.

Shih started SyncVoice a few years ago and “boot-strapped” it without venture funding. He wanted to get the company off the ground before investors tried to figure out how much it was worth.

“We brought it to profitability and ran it on a very small amount of capital,” Shih said.

SyncVoice received $4 million from Santa Monica-based Clearstone Venture Partners LLC and Hummer Winblad Venture Partners in San Francisco.

The company received interest from other funds, according to Shih.

In 2002, Shih sold Webalg Inc., a maker of automotive financing software, to Lake Success, N.Y.-based DealerTrack Inc., an automotive retailing software company.

SyncVoice likely will do another round of funding, probably at about $10 million, according to Shih.

The company’s software is used to manage communications, from making a call to running a videoconference or tapping a wireless “hot spot.”

SyncVoice has benefited from the growth of Web phone systems that use voice over Internet protocol. They’ve added to the complexity of communications networks at businesses.

The company’s software points out potential glitches and where a business could save money by ridding itself of unused bandwidth.

Shih added he’s gone from a dozen employees to about 30 in the past several months. That number could rise to 50 or more in the next year as the company builds out its sales and marketing teams, he said.


Speaking of Funding …

Who says you need revenue to get investors these days?

Carbon Micro Battery LLC said it has raised $500,000 in seed funding from an “Orange County angel investor” to help develop a prototype of its key product,extremely small batteries that use nanotechnology.

The angel investor wasn’t named.

Carbon Micro grew out of a lab at the University of California, Irvine.

Steve Cardona, a former IBM Corp. sales executive and onetime management consultant for KPMG International, is the chief executive of the 2-year-old company.

Cardona said he’s the company’s only “formal employee.”

About seven people are working on the prototype at a UC Irvine lab.

The company uses Cardona’s home address for now in San Clemente. He said he hopes to get another round of funding six months from now to land some office space.

“We want to spend the majority of seed funds on hard product development of the next level prototype,” he said.

Carbon Micro Battery is using nanotechnology to build tiny batteries that are longer lasting, have shorter charging times and can be more flexibly configured than batteries already out there.

Initial markets could include radio frequency identification tags and smart cards, miniature sensors and sensor networks and biomedical devices.

“UC Irvine is very pleased to see the creation and development of Carbon Micro Battery in Orange County as further evidence of the campus’ ongoing contributions to the economic vitality of the region and its ability to work with industry,” said Dave Schetter, director of the Office of Technology Alliances at UCI.


Intel inside Broadcom?

Could Broadcom Corp. buy a business unit from Intel Corp.?

Intel is in talks with several chipmakers and investment firms to unload part or all of its communications chip businesses, according to recently posted reports.

Of course, one of Intel’s biggest rivals in this area is Broadcom, the Irvine chipmaker that makes communications, networking and other types of chips.

Instat/MDR analyst Jim McGregor said Broadcom is among the potential suitors for the units, including the wireless chip unit, according to a recent article at BusinessWeek.com.

Nothing’s clear for now except that Intel is struggling. Intel’s management has been contemplating what to do with the communications group.

Several years ago, communications was seen as a way to diversify away from its core computer processors.

But the communications chips have been money-losers for Intel. Core chips have been picking up the slack.

Intel’s stock is down, and some say the move could help the company regain some of its lost luster.

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