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Alien Gets $38M in New Funding, Brings Total to $329M

Alien Technology announced it received $38 million in new investments, bringing its total to $329 million. The privately held maker of passive UHF RFID inlays and readers said it expects this is its final round of private financing.
Oct 06, 2008This article was originally published by RFID Update.

October 6, 2008—Alien Technology, a privately held RFID inlay and reader maker, announced today it received $38 million in new financing from existing investors.

"We're going to use the money mainly for general corporate purposes," CEO George Everhart told RFID Update. "It will mainly go to expand marketing and sales, research and development, and some for manufacturing expansion." Alien is headquartered in Morgan Hill, California, and has additional major facilities in Fargo, North Dakota; Dayton, Ohio; London; and Singapore.

In the same announcement, Alien said revenues for its recently-concluded 2008 fiscal year grew approximately 50 percent from fiscal year 2007, annual RFID inlay sales also reached new highs, and inlay production volume grow 76 percent.

"We're real happy with where the inlay business is," Everhart said.

Everhart would not disclose Alien's profitability status or cash flow. He said the company has improved its cash flow "substantially" in the last 16 months and does not anticipate seeking additional funding from investors.

"We anticipate this being the last round of funding," Everhart said. Venture investors typically either sell the companies they helped develop or take them public. Everhart said both strategies are options for Alien.

"The odds are always more likely that an M&A [merger and acquisition] will occur, but for this company an IPO is a possibility."

Alien canceled a planned IPO in August, 2006, citing market conditions. Since then it closed two more rounds of funding, receiving $33 million in April, 2007 and the $38 million announced today. The company has received $329 million in total since its founding in 1994. Existing investors Advanced Equities, New Enterprise Associates, Rho Ventures and Sunbridge Partners led the latest round.

Since June, 2006 only four private equity investments of $30 million or more have been announced for RFID companies, and Alien has received two of them. Everhart said Alien's latest round of fundraising started in July, well before the current problems in the credit markets surfaced.
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