CIA's investment arm expands high-tech reach

SAN JOSE, Calif. — In-Q-Tel, the venture capital arm of the CIA, is aggressively expanding its technology portfolio by pumping new investments into startups involved in networking, energy, semiconductor and software visualization.

On Thursday (Oct. 20), In-Q-Tel (Arlington, Va.) separately announced undisclosed investments in three startups and no less than six companies this week alone.

The spy agency's venture capital arm invested in two energy-related companies: Electro Energy Inc. and SkyBuilt Power Inc. It also poured money into two networking startups: Ember Corp., and Tendril Networks Inc.

And not to be outdone, it also invested in two security and visualization software companies: FMS Inc. and Idelix Software Inc.

In total, In-Q-Tel has invested in some 80 companies since its inception in 1999. The venture arm acts as an independent, private and not-for-profit company that assists the CIA in identifying, acquiring and deploying cutting-edge technologies.

After focusing on data mining and security technologies, the organization appears to be expanding into communications, energy, mesh networking, wireless and other new markets.

In 2003, for example, it invested $10 million in Bay Microsystems Inc., a developer of packet processing and traffic management chips. Last year, In-Q-Tel and others poured $7 million into Dust Inc., a developer of devices for wireless mesh sensor networks (see Feb. 18, 2004 story).

In-Q-Tel has expanded those efforts by investing in Ember and Tendril. Tendril develops software applications for seamlessly combining wireless sensor and control networks, while Ember sells wireless chips based on emerging ZigBee technology.

The CIA appears intent on exploring wireless sensor networking. "The next generation of computing will seamlessly network billions of embedded devices," In-Q-Tel CEO Gilman Louie said in a statement.

“Ember is the market leader with a mature platform that has been successfully deployed in a variety of applications around the world," he said. "We believe their technology has great potential to improve the security and efficiency of government and defense operations."