Cisco invests in networking start-up Avega

Participation in $7 million round for wireless-home specialist is designed to expand network-gear giant's consumer reach.
Written by Marguerite Reardon, Contributor
Cisco Systems is expanding its home networking efforts by participating in a $7 million round of funding in Avega Systems, a maker of wireless home technology, the companies said Tuesday.

Cisco joined two venture capital firms, Jafco Investment and Technology Venture Partners, in the start-up's second round of funding, but it did not disclose its share in the investment.

Avega, with employees in the United States and Australia, specializes in technology that can wirelessly connect home entertainment gear such as media center PCs, portable media players, cell phones, stereo equipment, networked storage and set-top boxes. The company has also developed technology that controls and manages these devices and the content it wirelessly shuttles through the house.

Cisco is well known as an infrastructure equipment maker. For years, it has supplied large businesses and Internet service providers with the switches and routers that shuttle Internet traffic from one place to another. Cisco now wants a piece of the burgeoning market for home entertainment networking gear.

People are just now beginning to share digitized music, video and photos throughout their homes. This trend, coupled with people downloading music and videos via the Internet, and service providers like phone companies and cable operators also delivering content via Internet Protocol technology, has put Cisco in a prime position to also supply infrastructure gear within the home.

Cisco already owns the wireless router brand Linksys. And last year, it spent $6.9 billion acquiring cable set-top box maker Scientific-Atlanta to help deliver video.

The investment in Avega fits in well with Cisco's home-networking vision, which includes connecting devices to the Internet and to other entertainment gadgets in the home.

While the company has long been known for its penchant for acquiring companies, Cisco also has invested in several start-ups, using those investments strategically to collaborate and embed new technology into its products. Avega already licenses some of its technology to other companies.

"Our recent customer negotiations, award nominations at the last two International Consumer Electronics Shows and media recognition validate the opportunity and the company's strong position in providing a complete end-to-end networked media connectivity solution for" original equipment manufacturers, Peter Celinski, co-founder of Avega Systems, said in a statement.

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