Financing a communications ecosystem: Blueprint Ventures rolls out new fund

A new communications-focused venture capital firm is making a name for itself in DSL and other next generation infrastructure and service provider investments. Two weeks ago, Blueprint Ventures announced its Emerging Communications Fund, a $150 million kitty for investing solely in early-stage communications companies.

Blueprint, started by Thomas Unterberg, chairman of C.E. Unterberg Towbin, and ex-Intel execs Bart Schachter and Ashley Read, has already given 25% of the fund to five companies: CopperCom, Flashcom, Oresis Communications, ShareGate and MobileStar Network.

Optical equipment and next generation service providers are two areas in which Blueprint hunts for suitable investments. "Optics and optical components and equipment will turn 20th century technology on its head," Schachter said. "The silicon revolution may become completely marginalized by what's happening in optics." To date, technology advances in equipment have not been fully leveraged by existing service providers' business models, Schachter said.

Blueprint's strategy is to invest in components, semiconductors, systems, service providers and software. The firm also wants to reach across all major transport areas - cellular, wireless, cable, DSL and optical.

To give these businesses a head start, Blueprint is building a "communications investment ecosystem," investing in start-ups that can bring value to other companies in the firm's portfolio. For example, ShareGate is a technology partner of CopperCom, and both sell to DSL service providers such as Flashcom.

Blueprint has invested from $3 million to $10 million, usually with multiple VC firms. The largest and latest funding round the firm participated in backed MobileStar with $38 million. MobileStar's proposition: high-speed wireless Internet access for business travelers in airports, hotels and convention centers.

The company already has installed its picocells and routers in 110 public access locations (PALs) and hopes to target 700 PALs operating in 130 cities by the end of the year. A user with the MobileStar client software and a PCMCIA card with a built-in radio can get T-1 speed wireless connections from a notebook PC while in the access points' coverage area.

"It's AT&T One Rate for data," said Mark Goode, president and CEO of MobileStar. "You can roam anywhere on our national footprint and have broadband connectivity."

Blueprint brings more than just cash to the relationship, Goode said. "Schachter is very well-connected and can facilitate introductions to key people. He's also a proven strategist who can assist us in taking the company to the next level." Schachter is a member of MobileStar's board of directors.

Another relatively new investment, Oresis, is building an integrated, carrier-class multiservice switch, the ISIS-700, which provides voice, data and video in a single switching platform. Blueprint contributed to Oresis' $25 million second round of financing, with money also provided by Bessemer Venture Partners and ComVentures.

The anchor investor in Blueprint's fund is Moore Capital Management. Other limited partners for this fund include C.E. Unterberg Towbin, BancBoston Ventures, Merrill Lynch, Salomon Smith Barney, J.F. Shea & Co. and Tudor Investments.

It seems every ex-technology executive and his brother is starting a venture fund these days, so Blueprint faces a lot of competition. But, Schachter said, "we're not in the money game; we're in the company-building game."