Asoka USA, a Foster City, Calif. maker of equipment that turns home electrical outlets into Internet broadband network endpoints, has raised a $7 million in a first round of capital.
The company says it has $6 million in revenue last year, but it must be losing money because the company’s valuation after the investment is only $15 million. Typically, if a company has revenue, it is valued at several times more than its revenue base. The round suggests the company was valued only at $8 million before the investment.
VentureWire (subscription required) first reported the news today.
Why Storm Ventures and Venrock, the investors, are backing this company is unclear. The company was started in 2001, when a number of similar companies were started trying to use powerlines for communication purposes. Most have bombed. Also, there’s plenty of competition from broadband and wireless technologies.
Apparenty, it has taken no capital until now, and last year began selling its products to telecom carriers such as AT&T and Comcast Corp.