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Opportunities for Series B Investors

Opportunities for Series B Investors. Agenda. Background Market Opportunity & Trends Virtual Wire Progress & Market Position Strategy & Product Direction Financial Projections Investment Highlights. Mission. Be a leading provider of mobile data solutions for broadband wireless

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Opportunities for Series B Investors

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  1. Opportunities for Series B Investors

  2. Agenda • Background • Market Opportunity & Trends • Virtual Wire Progress & Market Position • Strategy & Product Direction • Financial Projections • Investment Highlights

  3. Mission Be a leading provider of mobile data solutions for broadband wireless services and products Strategy & Product Direction

  4. Investment Summary • 3G market will launch in Japan and will experienceexplosive growth to 140M subscribers1 by 2004 • Multi-mode 3G and 2.5G will deploy in Europe, 200M Subscribers2 by 2004 • Early market entrants will be well positioned to take a reasonable market share • 3G chip sets revenue will exceed $8 billion by 2007 • Competition will be both existing players and new entrants, room for multiple players • Virtual Wire has a head start in the development of Chipset Solutions for 3G and already has a reference platform • Virtual Wire is well positioned to reward investors Background Source1: Ovum Report on 3G Source2: Wit SoundView Report on GPRS

  5. Virtual Wire, Inc. • Incorporated November 2000 - Sunnyvale California • Joint Venture formed by Virtual Silicon and SASKEN focused on next generation wireless business • Seasoned management team • 38 full time employees with locations in Bangalore India and Silicon Valley • Key partners, SASKEN, Virtual Silicon, BOPS, and eASIC • System, Software, Hardware and Silicon experience in wireless communications Background

  6. Chipset / SOC Handset Developers End User Device Developers 3G Silicon Value Chain Technology License RISC, DSP Cores High speed memories etc. Technology House SASKEN UMC Physical Libraries Process Technology Low Power Design SOC Technology Virtual Silicon 1 Billion by 2010

  7. 3G More than just voice Market Opportunity & Trends Source: NTT DoCoMo Website

  8. 3G More than just voice Market Opportunity & Trends Source: NTT DoCoMo Website

  9. Agenda • Background • Market Opportunity & Trends • Virtual Wire Progress & Market Position • Strategy & Product Direction • Financial projections • Investment Highlights

  10. Why Must Markets Evolve from 2G to 3G? • Spectrum is a key motivator: • Access to new spectrum • Better use of existing spectrum • The bandwidth explosion • Mobile data is now entrenched and user data rates are growing from 9.6 kbps to 64 kbps and more… • Content is king • The need to access more than voice content… context & location sensitive graphic data is increasing in demand for business and lifestyle • The “Killer Application” is more likely to be the “Killer Business Case” Where Content can be accessed from any source* • All devices communicate • Person to Person • Person to Machine • Machine to Machine Market Opportunity & Trends Source* Herscel Shosteck Associates

  11. 2.5G 3G CDMA IS95A IS95B 1xRTT cdma2000 TDMA 2.5G IS136 EDGE WCDMA GPRS GSM 3G GSM 14.4kbps 64kbps/ 384kbps 2Mbps 144kbps Evolution path to 3G Market Opportunity & Trends

  12. A Wireless Connected World! Market Opportunity & Trends

  13. MOBILE OPERATORS • Legacy • Invested heavily on UMTS licenses • Expectation • To rule over the mobile Internet value chain, especially through strong portals CAR MANUFACTURERS EQUIPMENT VENDORS • Legacy • Traditional mobile environment and closeness to consumer • Expectation • Gain multimedia service revenues as “hardware” managing service • Legacy • R+D investment in UMTS • Closeness to operator • Expectation • To be leading UMTS equipment provider, possibly with increased “grip” on the end customer NEW PLAYERS FIXED INTERNET PORTALS • Legacy • Entrepreneurs sensing an opportunity • Expectation • Become a leading point of access to mobile Internet by moving fast • Legacy • Very successful in attracting traffic • Expectation • Translate success to mobile Internet MVNOs CONTENT PROVIDERS • Legacy • Strong brands • Expectation • Expand brand relationship to new environments to enhance revenues • Legacy • Popular, strong brands • Expectation • Increase channels of distribution and move in portal space Players have different legacies and expectations. Competition through partnerships and alliances is sure to become intense… Market Trends

  14. Market Segmentation • Based on user groups the market can be split into three groups: • Vertical market • The most profitable mobile data applications in the marketplace today • Examples: Transport and Logistics, Public Safety, Vending machines, telemedicine • Business market (Nature of business dependant) • Examples: Unified Messaging, Schedule management, File and database access, Net meeting etc. • Consumer market (Lifestyle driven market) • Defined by user attitudes and needs. • Examples: Messaging, Radio, Music, Banking, Chat rooms, Shopping etc.

  15. Assumptions; ASP of $20 a chipset1 Rapid revenue growth to over 12 billion, in 6 years Market for 3G Chipsets $8B Millions of Units Market Opportunity & Trends Note1 : Base band Chipset Revenue $M 60 300 820 2440 4320 7680 Source: Ovum Report on 3G

  16. Agenda • Background • Market Opportunity & Trends • Virtual Wire Progress & Technology • Strategy & Product Direction • Financial projections • Investment Highlights

  17. Progress Report • March 1999:Participates in the evolution and dedicates a team to develop a 3G reference platform for the “User Equipment” market • June 1999:Starts development of Broadband IP, RF and mix signal research • November 2000:Virtual Silicon and SASKEN form a joint venture Virtual Wire Inc. to aggressively pursue 3G with baseband chip sets • December 2000:Team of 38 employees assembled to focus development of WCDMA Reference Platform, and Silicon Products • To Date: $8.5M + invested and 250 Person Years of development complete • Implementation of 3GPP Release ‘99 compliant Hardware & Software including the Protocol stack Virtual Wire Progress & Technology

  18. Positive Momentum • Virtual Wire Inc., formed • Strong wireless Broadband System,Software and Hardware Team • 3 Patent Applications for receiver design • Real time demonstration of Speech and Web browsing • Reference Board scheduled for Release Q2 2001 • FlexSiTm silicon development started for Release Q4 2001 • Actively engaged with customers in defining the 1st generation product • MOU signed with #1 supplier of RF component supplier in Japan Virtual Wire Progress & Technology

  19. Management Team   Executive Officers Board of Directors • Michael Kliment • CEO and President • Prior: Virtual Silicon, COMPASS, VLSI, Intel Michael Kliment CEO and President • Dipu Pramani • Sr VP of Engineering • Prior: VLSI, AMI • Tony Moroyan • President, Via Sphere Rajiv Mody1 CEO, SASKEN Virtual Wire Progress & Technology • Suresh Agarwal • VP of Marketing & Business Development • prior: Neomagic,Chips and Technology,AMD • Joseph Drori • VP Engineering, SOC design • Prior: Xicor, National Taylor Scanlon CEO and President of Virtual Silicon • Sylvia Shively • Corporate Controller • Prior: Virtual Silicon, DSP Group Note1 SASKEN can have up to 2 board seats  

  20. Advisory Board  Technical Advisors Virtual Wire Progress & Technology 

  21. Executive Team, Details • CEO & President - Michael Kliment Prior: Was CTO & Co-founder of Virtual Silicon, $20M run rate and 70 employees, top three providers of Physical IP. He has 20 years of management and business experience in the development of IC design technology for custom and ASIC applications. VLSI Technology, Compass Design Automation and Intel • Sr. VP of Engineering & Technology - Dipu Pramanik Prior: Was Director of SOC Technology at Virtual Silicon and Director of RFTechnologyat VLSI Technology. Has over 20 years of semiconductor experience in the development of ASIC technology and introduction of advanced products in the areas of computing, networking and communications. Over 25 issued patents, AMI,Signetics • VP of SOC Engineering - Joseph Drori Prior: Employee #5 Xicor Inc. Was Vice president of Engineering and Product Definition. Has over 20 years of semiconductor experience at Xicor developing over a 100 innovative products in the area of power management, low power DSP, integrated NVM, linear EEpots and specialty memory for smart cards and cellular phone applications. Virtual Wire Progress & Technology

  22. Executive Team, Details • VP of Marketing & Business Development- Suresh Agarwal Prior: one of the first 10 employees of NeoMagic, Chips and Technology. Has 17 years of marketing, system and semiconductor experience. Instrumental in bringing NeoMagic from early stage to a successful public company. Suresh lead business unit, marketing and engineering efforts to measurable success. He is US patent holder in audio mixing and digital audio. • Corporate Controller - Sylvia Shively Prior: Corporate Controller for, Virtual Silicon, DSP Group Inc. and DSP Semiconductor. Has over 10 years experience in financial analyst and controller positions. Virtual Wire Progress & Technology

  23. Engineering Team • Wireless system design and reference design are being done in Bangalore. • Chip design center is being established in Silicon Valley • Operations will be based in Silicon Valley • Initial wafer fabrication will be done at UMC • Test engineering will be based in Silicon Valley Virtual Wire Progress & Technology

  24. An investment in people Virtual Wire Progress & Technology

  25. SystemSpecs Virtual Wire system specs

  26. Roadmap for Development Platform • Release 1.0 (Q2 2001) • Command line controller • Ethernet/USB/RS232/SIM card interfaces • Fully functional 3GPP Protocol Stack • 3GPP Baseband Physical Layer (Baseline capabilities) • RF module and RF interface • Data Rates: Uplink - 64 Kbps, Downlink - 384 Kbps • Release 2.0 (Q3 2001) • GUI interface • Support for speech services • Data Rates: Uplink - 64 Kbps, Downlink - 384 Kbps • Release 3.0 (Q4 2001) • Support for Bearer services and simultaneous applications • Support for Turbo Coding • Symmetric Data rates in uplink and downlink (384 Kbps) • Inter-operability testing Virtual Wire Progress & Technology Note: A Release implies a hardware-software implementation that has gone through the product verification phase

  27. FlexSiTM -Platform Chip Digital I/O & Control I/F Mem Hardware accelerator SRAM BOPS DMA Peripherals Memory/Expansion bus AHB RS232 PLL/ Clock USB DMA ARM 922T SRAM SIM APB Clock MDB Example of a WCDMA SOC with some standard peripheral interfaces Hardware accelerator consists of both the transmitter and receiver sections, including the RAKE receiver. Many of the cell search operations and bit processing are done in DSP.

  28. Features to be supported • Circuit switched (Voice) and packet switch (data) to support-Conversational and streaming class-Interactive and background class • Ability to interface baseband chip with third party media processors . • Power budget of 450mW.

  29. Key Technical features • ARM 922T to run protocol stack , RTOS and drivers for peripherals • DSP core with >1000 MIPs to do portions of the physical layer processing and allow changes to the functionality , through firmware. • Low power receiver architecture. • Low power and leakage memory blocks • Low power turbo decoder block • Configurable bus interfaces.

  30. System Level Diagram Digital I/O & Control I/F Mem Hardware accelerator SRAM BOPS DMA Media Processor MDB Memory/Expansion bus AHB PLL/ Clock DMA Programmable controller ARM 922T SRAM Clock WCDMA baseband processor with a configurable interface to an external media processor or to a standard computer/industrial bus.

  31. Product Rollout Year 1999 2000 2001 2002 2003 Start of WCDMA Program Algorithm Development Virtual Wire Progress & Technology Hardware/Software Partition Development Platforms First Silicon Flexi-platform Custom Chip Sets

  32. Agenda • Background • Market Opportunity & Trends • Virtual Wire Progress & Technology • Strategy & Product Direction • Financial projections • Investment Highlights

  33. Business Strategy • Build a flexible W-CDMA platform with several industry standard interfaces. • Focus on Japan market where first rollout of W-CDMA will occur first • Provide dual mode capabilities supporting W-CDMA GSM and GPRS for Europe and Americas • Partner with key customers to drive development of products for target markets • Provide a complete hardware/software solution. Strategy & Product Direction

  34. SP/PE SP/PE SP/PE Solutions Board based platform to verify Hardware/Software solution for W-CDMA. Platform SOC solutionimplementing W-CDMA Strategy & Product Direction VWI + One chip custom solution Embedded core in multiple designs

  35. Customers • PDA providers • Portable computer providers • Auto electronics • Home networking • Consumer electronics • Industrial electronics Strategy & Product Direction

  36. Products • Development Platform for development, testing and demonstration • Wireless platform on chipwith WCDMA processor and re-configurable logic for prototypes and custom industrial applications. • Digital chips incorporating WCDMA processor , with peripheral logic customized for different markets and applications. • Digital chips with multi-mode capabilities integrating, different standards like WCDMA, GPRS, GSM Strategy & Product Direction

  37. Competitive Strategy • Competition will be a mix of existing players and new • Existing: TI, Qualcomm, Intel, Conexant, Philips …. • Virtual Wire is focused on 3G and by virtue of building in: • Japan deployment through strategic relationship • Multi-mode capability for legacy infrastructure • Re-configurable interfaces for different applications • Proprietary interface with the host processors • Custom features for mobile Industrial and business applications Strategy & Product Direction Our experience and proprietary technology positions Virtual Wire to become the leading supplier in this market !

  38. Competitive Strategy In Progress • Currently in discussion with large Japanese companies that are currently building or supplying components to the 2G, 2.5G handsets and need a solution for 3G • Develop complete end to end solution • Use their Sales Channel, cross brand components • Share development platform • In discussion with suppliers of technology to application appliance market that need to add 3G • Real customer / end user • learn the needs of terminals and hand held appliances • Get and grow market share as the market develops Strategy & Product Direction

  39. Agenda • Background • Market Opportunity & Trends • Virtual Wire Progress & Technology • Strategy & Product Direction • Financial projections • Investment Highlights

  40. Financials

  41. Financials • Expected Break even in the 3rd year • Revenue to exceed US $ 100 Million within 4 years of operation • Operating Margin targeted 50% • Assumes $16M Series B and $10M Series C

  42. Agenda • Background • Market Opportunity & Trends • Virtual Wire Progress & Technology • Strategy & Product Direction • Financial projections • Investment Highlights

  43. Investor Summary • Virtual Wire is unique startup opportunity with IP and Engineering capable of producing 3G baseband solutions • 3G market is vast and segmentation will allow Virtual Wire to participate in the emerging $8B chipset market • Virtual Wire well poised to capture the early market resulting in significant rewards to investors • Goal is to close seriesB by early Q2

  44. Ownership View Series A Series B Virtual Silicon Virtual Silicon 24% SASKEN SASKEN 56% New Investors Employees Employees 20% 20% 10 Million Shares $8.5 + Million Invested X Million Shares $16-20 Million New Investment

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