Although venture capital firms and day traders have embraced dot-com companies in a manic bid for riches, the expected explosion of wireless Internet services and equipment companies has prompted newfound interest by investors.
Venture capital firm Monarch Partners announced a new $300 million wireless fund today. Also, Value Trend Capital Management and Berkshire Capital Holdings are set to launch The Wireless Fund, a mutual fund focusing on wireless stocks, early next month.
"We think it's a very exciting, interesting place to invest," said Roland Van der Meer, a partner at ComVentures, a communications industry venture capital firm. "Next to the Internet, we think (wireless is) the No. 2 place to invest. Unequivocally it's the largest growth industry next to the Internet."
The funding moves represent the latest indication that wireless technologies may be the next great investment opportunity. Investors who scrambled to buy stock in e-commerce start-ups, for example, may have missed wireless technology provider Qualcomm's phenomenal run last year.
Hundreds of companies gathered at the Wireless 2000 industry trade show earlier this month to showcase new products and services aimed at making the Internet mobile, eliciting positive reactions from analysts and executives.
"Wireless is coming of age and we want to make sure we focus our investments at the technology that enables the rich content and commerce to trickle down to nearly 1 billion wireless devices that will be available by 2003," said Monarch general partner John Brewer.
Monarch Partners, an Atlanta- and Dallas-based venture capital firm that largely seeds Southern firms, will fund wireless companies with at least $100 million this year with plans to dole out as much as $300 million over the next three years.
Monarch named Gerry Purdy, president of wireless industry consulting firm Mobile Insights, as a general partner. The firm also is expected to announce a new Palo Alto, Calif., office this week.
"There's more people that use cell phones than surf the Internet," said Jeff Provence, Value Trend's fund manager. "The thing that's so exciting about the wireless industry is that data transfer rates are just exploding. So it's basically an area that we're absolutely confident about."
Provence said that although several mutual funds currently target the communications industry, few if any invest in wireless stocks specifically.