NEWS

In-Vehicle TV Firm RaySat Says Funding Will Underwrite U.S. Market Growth

By Rachel Nielsen 6/24/2004
Dow Jones VentureWire

With seasoned executives and a well-connected investor, RaySat Mobile Antennas plans to use its recent round of funding to bring live satellite TV to American vehicles.

RaySat, which last week closed $10 million in a Series A round of funding led by Benchmark Capital with participation from Israel Seed Partners, has developed an antenna for minivans and sports utility vehicles.

The roof-mounted device, which looks like a five-inch-thick metal plate, is designed to give passengers live satellite TV programming while the vehicle is in motion.

RaySat also has an eight-inch-high satellite product that enables high-speed Internet access on trains, buses and boats, which already has been deployed with about four national railways in Europe.

But the company now is honing in on the U.S. market, as well as Canadian and Mexican markets. And it is anticipating so much demand for its vehicle antenna that it doesn't foresee needing any other funding to reach breakeven, said Samer Salameh, its president and chief executive.

Salameh said the Series A funding will be used to ramp up operations and marketing in anticipation of substantial U.S. demand for its vehicle antenna. Called StingRay, it will have an initial retail price of around $3,000.

In the marketing front, "now we're going to have to go after all the car manufacturers," said Salameh. He said RaySat will try to sell StingRay through car dealerships and aftermarket auto dealers.

Asked if he thinks the company will be able to convince major U.S. car makers to pre-install StingRay, he replied, "Absolutely." The product will be available in October, according to chairman Yoel Gat.

The company's other offering, its TorpedoRay L4, has been deployed with railways in the U.K., as well as with the major national railway in Sweden.

TorpedoRay L4 enables a wireless local-area network -- or Wi-Fi network -- inside the train. This connects the train's router and a passenger's mobile-equipped device, such as a handheld computer. The data is then connected to a satellite system or, when the train goes through a tunnel, to a GPRS cellular system.

It uses line of site technology, said Gat, meaning RaySat's satellite antenna needs a clear line to receive the satellite signal.

The company largely has operated as a research shop out of Sofia, Bulgaria, since its founding in 1997.

Previously called Skygate, it was majority-owned by Jean Frydman, a French-Israel businessman, until some of his stake was bought a year or so ago by Gat. Gat is the former chairman and chief executive of Gilat Satellite Networks Ltd., a publicly traded satellite firm.

As a result Gat is RaySat's chairman and owns roughly 25% of the company. Frydman still owns a share, also roughly 25%.

RaySat president and CEO Salameh was chief executive of satellite-based phone company rStar Corp. He joined the company about a month and a half ago.

Neither Salameh nor Gat could say how the company started. RaySat still has its research and development based in Sofia, with 65 engineers there. It has 80 employees in Bulgaria and about 100 employees overall.

Company headquarters are now in McLean, Va. Total funding is over $10 million, but the exact figure isn't available.