Welcome back to Baby Breakerdom! This week's quest to uncover budding Rule Breakers finds us dialing for telecom dollars and cashing in on community.
First up this week is Telsima, which, by building and selling WiMax equipment, offers what may yet prove to be the safest way to invest in emerging markets like India and Thailand.
Why? Emerging markets have notoriously little in the way of landline communications infrastructure. That's why India, which counts only 41 million landlines among its 207 million phone connections, is one of the world's most attractive markets for Nokia (NYSE: NOK ) , Motorola (NYSE: MOT ) , and Samsung. There's little alternative to a good handset.
WiMax, which wirelessly broadcasts Internet signals over great distances, could further exploit the lack of landlines if it's deployed cost-effectively. That's why Clearwire, which took in $900 million in private equity investment from Intel (Nasdaq: INTC ) and Motorola in July and in December filed for an IPO for the second time, has earned headlines.
But Telsima doesn't want to be a carrier like Clearwire; it wants to sell to the carriers. Telsima's products are combinations of hardware that, like the routers and switches that power landline networks, broadcast and secure WiMax signals.
Expect Sprint Nextel (NYSE: S ) , which already has plans to commit $3 billion to WiMax, to be interested. Same goes for AT&T (NYSE: T ) and Verizon (NYSE: VZ ) , neither of which would care to see Sprint -- or Clearwire -- dominate an emerging niche.
Still, I sense there's an even bigger opportunity overseas. So do Telsima's investors, who have committed $50 million to the company and include international funds JAFCO Asia and NewPath Ventures, as well as Silicon Valley superstars CEMA Ventures and New Enterprise Associates. Add this one to your IPO watch list, Fool.
Next up is the oddly named Lithium. When it isn't reminding me of fictional hit man Martin Q. Blank's heavily medicated mother (expertly played by Barbara Harris) in Grosse Pointe Blank, it produces tools that help businesses create online communities.
It seems like a wonderful idea. Blogs, Web 2.0, and community are close to reaching bubble proportions. Don't believe me? Ask Google (Nasdaq: GOOG ) why it spent $1.2 billion for YouTube. Or, for that matter, why it spent $3.1 billion for DoubleClick.
But, of course, you know why. Big Goo, like everyone else, is convinced that riches await the firms that control the communities of choice on the Web. Lithium could lend credence to the theory: It has bootstrapped itself by selling the social networking equivalent of shovels and pick axes to many would-be MySpace replacements.
Many more could still be out there -- or so say Shasta Ventures and Emergence Capital. Together they've teamed to supply Lithium with $9 million in first-round funding.
I think they're right. If The Motley Fool proves anything, it's that communities of interest, when gathered efficiently and with the right spirit, can flourish on the Web. And there are literally thousands of potentially lucrative communities of interest -- from the pick of LoopNet by the commercial real estate experts at Rule Breakers to the where-have-you-been-all-these-years reunionistas at Baby Breaker myYearbook. Expect them all to at least give Lithium's products a look, which makes the firm a candidate for this week's IPO watchlist.
See you back here next time, when we continue the quest to find the greatest growth.
For more Rule Breaking Foolishness:
- Check in with our last litter of infants.
- Get five undiscovered growth stocks.
- Sometimes, the best growth stocks are also the best value stocks.
- Check on the latest list of top growth stocks.
How great is growth? Four of the dozens of stocks in the market-beating Motley Fool Rule Breakers portfolio, which includes LoopNet, have at least doubled in the first two years of the service. Care to find out who they are? Get 30 days of free access to Rule Breakers. There's no obligation to subscribe.
Fool contributor Tim Beyers, who's ranked 3,159 out of more than 27,700 in Motley Fool CAPS, is a sucker for growth stocks and a contributor to the Rule Breakers team. Tim owned shares of Nokia at the time of publication. His holdings can be found at Tim's Fool profile. LoopNet is a pick of the Motley Fool Hidden Gems service, and Intel is an Inside Value pick. The Fool's disclosure policy is a rebel on Wall Street.