Wideband chipmaker TZero sells out to medical imaging co.

Narrowly escaping closure, wideband chip maker TZero Technologies has sold to medical imaging company NDS Surgical Imaging, one of its customers, reports VentureWire. No financial terms were disclosed, but most of the engineering personnel will be transferred seamlessly.

TZero attributes its failure — which came despite $61 million in capital — to a lack of applications for its technology. It specialized in chips used to wirelessly beam content between high-definition video devices at short ranges. It had lined up several customers when its product first launched a year ago, including Hitachi and several medical companies looking for a more efficient way to use video in operating rooms.

When TZero’s chips failed to gain traction due to the slow economy, the company started pursuing an acquisition deal. It’s yet another casualty in the battered wideband space, which has seen a flurry of closures and consolidations in the past year. Competitor Radiospire Networks has also shut down.

Founded in 2003, Santa Clara, Calif.-based TZero was backed by August Capital, CID Group, Lightspeed Venture Partners, OVP Venture Partners, U.S. Venture Partners and VentureTech Alliance. It last raised $18 million in a third round of funding in March 2007 and struggled unsuccessfully to raise financing since. NDS, on the other hand, was acquired by Riverside Partners in 2006, and bought medical imaging technology from Planar Systems for $34 million last summer.

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