Lynx Real-Time Systems Inc, the embedded operating system company, has received a substantial cash injection from Motorola Inc, enabling the privately held company to accelerate its development of real time operating systems for use in Motorola’s communications infrastructure products. Lynx currently sells its operating systems into the aerospace, defense and communications markets, but with the entrance of communications giant Motorola, it will become heavily telecommunications focused. Motorola is handing over its cash in return for an equity stake, added to which Motorola will have representation on the Lynx’s board. Nobody at either company would disclose the size of the investment but Lynx’s CEO, Dr Inder Singh, said it was towards the high end of what might be expected, placing it around the 30% to 40% range. Lynx has been funded internally to date, with no input from venture capitalists or other financiers, which has left room for Motorola to step in as a substantial, but not majority, investor. Dr Singh explained that after three internal fund raising rounds, and several quarters of uneven cash flow from bumpy earnings, Lynx was happy to accept what he called mezzanine, or intermediate, financing prior to an IPO in the next year or two. Less tangible but equally important will be the ringing endorsement from Motorola of Lynx’s real time operating system technology, LynxOS. The investment deal, which has been backed by five different technology groups within Motorola, brings with it no obligations preventing Lynx from licensing its technology to competitors of Motorola, said Dr Singh, and it will help raise Lynx’s credibility with its billion dollar customers. Lynx, a ten year-old company, currently employs 100 people, with plans to recruit 40 more this year. Asked about the threat of Microsoft adapting its Windows CE operating system to compete in the ‘real time’ space, Dr Singh predicted that CE would be biggest where users could recognize the brand name, such as set top boxes and palm top computers, but would have little impact in the communications infrastructure space where performance is the key differentiator.
