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RFID Tag Demand Helps Omni-ID Net $15M in Funding
Omni-ID, a one-year-old startup, received $15 million in Series C venture funding. The company said strong demand from the data center market for its tags that perform well on metal led it to seek additional funding so it could expand production and marketing.
Feb 12, 2009—This article was originally published by RFID Update.
February 12, 2009—Omni-ID, a startup that develops passive UHF RFID tags for use on metal and other challenging materials, announced it received approximately $15 million in new funding from its previous investors. The Silicon Valley firm that launched one year ago said it would use the money to increase production capacity and expand sales and marketing efforts, particularly in the Asian region.
Omni-ID sought the capital to ensure it could meet demand for its products, which include passive UHF tags that offer consistent performance when used around metal, liquids and less-challenging materials (see Startup Offers "Universal Tag" for Metals and Liquids for more background).
Data center automation is driving demand for Omni-ID's tags, which function well when applied to metal racks and servers, president and CEO Tom Pavela told RFID Update.
"In 2008, Omni-ID established a 'beachhead' in the IT market sector where moves by some of the major U.S. banks have led the way in IT asset tagging with RFID," Pavela said. "The motives for tagging in the financial sector are high not only because of the importance of IT infrastructure on daily operations, but also because of the regulatory and business operation requirements for tracking IT equipment and the data stored on them. So we forecast continued demand from this vertical market."
VDC Research, an industry research and advisory firm, has also predicted IT asset management will be a strong application market for RFID this year (see VDC: RFID Growth to Slow Sharply, But No Contraction). Some of the strongest interest in this application comes from the financial services industry, which last year began standards development to facilitate RFID adoption (see Banking Interest Climbs for RFID, Spurs Standards).
Omni-ID is also getting a boost from IBM, which uses Omni-ID tags to track assets in some of its asset centers, and also offers them to customers that it manages data centers for in the U.S. and Europe, according to Pavela. He also expects strong demand from Asia this year, and has earmarked some of the new venture funding to increase the company's sales and marketing penetration there.
UK-based Cody Gate Ventures, a previous Omni-ID investor, provided the latest round of financing. Cody Gate invested £10 million, which is worth approximately $15 million.
"As you may expect, the climate today for attracting venture funding is absolutely horrible, especially for early stage companies. We feel very fortunate to have secured $15M for our Series C funding from Cody Gate Ventures," Pavela said. "This round is significantly more than what we raised through Cody Gate in the Series A and B rounds and will give us some 'runway' to continue to grow the company."
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