Cisco, SAP Invest In RFID Startup

Chelmsford, Mass.-based Reva Systems, which develops radio-frequency identification technology, said this week it raised a $13.5 million round of venture capital funding that includes money from technology giants Cisco Systems Inc. and SAP Ventures, venture capital arm of German software maker SAP AG.

The capital brings Reva's total funding to $20 million in two rounds since 2004. North Bridge Venture Partners and Charles River Ventures, both in Waltham, Mass., also contributed to the latest round.

Reva sells network infrastructure appliances to manage RFID data and systems from multiple vendors, supported by about 35 employees. The company will work to ensure integration of its appliance with Cisco's network, and SAP's applications and back-end business systems.

David Hornik, general partner at Venture capital firm August Capital, said in an e-mail: "I saw a large number of companies chasing the RFID startup market a couple years back, but haven't seen as many over the last couple years. We continue to see large numbers of WiFi and wireless data related businesses, and remain really excited about the possibilities."

The tech sector hasn't seen much venture capital investments in RFID startups this year, but there have been some acquisitions by large corporations. Lockheed Martin acquiring Savi Technology Inc., and Motorola gobbling up Symbol Technologies Inc. are two examples.

The industry could continue to consolidate, giving startups a path to build out software and hardware platforms within larger companies. Middleware vendors could get swallowed by IBM Corp., for example, said Greg Aimi, director of supply chain research at AMR Research Inc.

"I haven't seen a ton of venture capital investments in tech and infrastructure players," Aimi said. "In fact, it's been quiet this year except for the acquisitions during the past few months."

Aimi said large companies like Motorola, Cisco and SAP are stepping up their position in RFID, attributing the technology's move from startup into growth.