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iSKY Attracts Kleiner Perkins, TV Guide and Liberty Media, In $50 Million Second Round Funding
DENVER, Jan. 18 /PRNewswire/ -- The interest in iSKY is soaring to new heights as the company secures $50 million in second-round funding from blue-chip investors including Kleiner Perkins Caufield & Byers (http://www.kpcb.com ), TV Guide (http://www.tvguide.com ) and Liberty Media (http://www.iSKY.net ). Kleiner Perkins Caufield & Byers and TV Guide also participated in the first round of iSKY funding. Liberty Media is a new iSKY investor.
iSKY will help eliminate the ''digital divide'' when the company rolls out its broadband satellite service in 2001. No longer will affordable high-speed Internet access be available only to urban and more affluent areas. The company will deliver two-way, wireless, and affordable broadband Internet access via satellite to any home or small office in the United States, Canada and Latin America. iSKY's motto is ''High Speed Internet. Anywhere.''
''We forecast that 25 to 30 million U.S. homes, and 70 to 80 million Latin American homes, will not have access to other broadband solutions when our service hits the market next year,'' said Thomas Moore, president and CEO of iSKY. ''Of those, we expect a significant number will choose a satellite broadband solution. Our high-speed, user-friendly and low-cost service will contribute to our success.''
Unlike many other upcoming next-generation Ka-band satellite projects that will primarily serve businesses, iSKY's focus is on delivering an affordable broadband solution to the home and small office/home office (SOHO) markets. This is possible because iSKY's system was designed from the beginning to meet the needs of consumers for a fast and affordable solution. Like satellite TV, iSKY will be simple and reliable. iSKY's standard consumer service will offer download speeds of up to 1.5 million bits per second (Mbps) -- almost 30 times the best current dial-up speed of 56k.
''This is going to be the '@Home In The Sky','' said Russ Siegelman, Kleiner Perkins Caufield & Byers partner and iSKY board member, referring to Excite @Home's cable modem service, which Kleiner Perkins also helped fund. ''iSKY's management team helped create the world-standard terrestrial cable modem technology, and they will bring the same successful approach to satellite broadband.''
''Compared to other satellite projects, iSKY's capital costs to build and launch their satellites are significantly lower, increasing the opportunity for financial success in the consumer broadband arena,'' said Peter Boylan, president & COO of TV Guide and iSKY board member.
This investment puts iSKY on target to meet its financing goals. iSKY will spend three quarters of a billion dollars to build and launch the company's first two satellites serving North America and Latin America, and for operating expenses. To date, iSKY has secured financing for approximately one third of that total. iSKY has retained Donaldson, Lufkin & Jenrette and Morgan Stanley Dean Witter as its investment bankers to help it meet the remainder of its financing needs over the next 18 months.
''We are excited about the whole satellite broadband category,'' said Gary Howard, executive vice president and COO of Liberty Media. ''iSKY represents an exciting business plan to attack the domestic consumer market.''
When the investment closes, TV Guide will own 19 percent, Kleiner Perkins will own 18 percent and Liberty Media will own 17 percent of iSKY. Liberty's investment in iSKY is expected to be held by LSAT, LLC, a limited liability corporation between Liberty Media and TSAT that is 90 percent owned by Liberty Media.
This transaction was made possible by the FCC's grant of iSKY's application to change control from Televerde Communications LP, its founding shareholder.
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