Funding Mobile – By Any Means Necessary
A few months ago, the rumors were flying around about Palm being an acquisition target. Motorola’s intentions turned out to be false, and they themselves are struggling to get the ship turned in the right direction. The on again off again relationship between its hardware and software sides finally resolved itself, by selling PalmSource to Access Systems. As that was happening, Palm embraced Windows Mobile to hedge their bets as well as gain some market share. While Palm remains as the largest licensee of the relabeled Garnet OS, what about the fate of Palm? Now the latest news that Palm has sought a partner to help it’s woes,
Elevation Partners will invest $325MM! For a
fifteen year old company, taking on new investment, after already going through a lot of roller coaster M&A activity and a successful IPO, this continues to be one of the more interesting companies for both the technology and financial communities to watch. The mobile computing company continues to thrive and struggle all at the same time.What’s next? I wonder if other struggling companies will evaluate the structure of the latest Palm deal and decide that a similar course of action might make sense. Earlier this year,
Sun Microsystems, also received a huge injection of investment of $700MM from KKR Private Equity Investors. Will Openwave be successful in seeking investment? The reports about Harbinger Capital are not progressing. Or will they become a target for some other company? Would Sybase or Verisign be next? So perhaps other companies will find solace again with Private Equity.
A few weeks ago in May, much to the surprise, Alltel decided to allow Goldman Sachs and TPG (formerly Texas Pacific Group) for a leverage buyout of $27.5B. My guess would have been that Alltel would have been acquired by Verizon Wireless. But by taking this course of action, Verizon could still buy pieces of Alltel, but from Goldman and TPG. This may be a better alternative since Verizon could extract with surgical precision the pieces of Alltel’s enterprise, without having to take on any debt.
From a timing perspective, I would agree that now is perhaps one of the best times to look for investment money. It’s quite abundant, in fact, several Venture Capitalists that I have conversed with over the last couple months, all agree that the glut of money in tech is tremendous. Smart executives find a way to be creative and innovative, particularly when they need to keep people employed and a computer going. It’s always easier to raise money when you don’t need it — because when the rainy days come, scrambling around to find shelter from bankers just gets you tired, frustrated and wet.