Motorola boosts venture capital

CHICAGO -- Motorola Inc.'s venture capital arm aims to boost its investments to more than $100 million this year, betting on technologies including automotive electronics, high-speed wireless communications, and advanced optical systems.

Warren Holtsberg, 54, the corporate vice president in charge of the division, said in a recent interview that Motorola Ventures wants to make its parent more competitive in technologies that support advanced networks and electronics

Motorola Ventures has averaged about $100 million in investments each year, he said. Last year, it took stakes in some 25 start-ups, including KXEN, a predictive modeling software developer, SkyBitz, a maker of satellite fleet tracking systems, and Camero, which builds radar imaging. It has some 70 holdings.

The annual venture capital investment may be a drop in the bucket for the world's number two cellphone maker, which had $31.3 billion in sales last year. But it still ranks the Motorola unit among the top five venture arms of US corporations,

The division offers early-stage technologies to Motorola, giving the company a leg up in a telecommunications market undergoing a rapid shift to faster networks, increased use of the Internet to transmit phone calls and data, and consumers' endless desire for mobile phones with richer features.

"We can save ourselves time to market, internal development costs, and in some instances, employee costs," Holtsberg said.

Today, Motorola Ventures will announce a stake in Lumus Ltd., an Israeli developer of an advanced optical technology used in hand-held screens for pocket PCs.

The venture arm, staffed by about 15, has its eye on growing technology hotbeds such as China and Israel. It has set up offices in those countries, in addition to the United States and Britain. Two additional investments are planned within weeks, Holtsberg said.

The unit typically makes an investment of about $3 million to $5 million in a company that has cleared the early "beta" stage, Holtsberg said.

Rarely does Motorola Ventures buy investments outright -- an exception was the November agreement to buy MeshNetworks Inc., a developer of high-speed communication networks.

Instead, its strategy is to prepare a venture for the next stage, such as entry into the public markets or a merger with another private company.

Meanwhile, the complement to Motorola's own research and development operation is a key benefit; the company only recently emerged from several years of belt-tightening and painful job cuts. Founded in 1999, Motorola Ventures finances investments through the company's corporate reserves.