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Some broadband-related companies have been able to secure financing through public equity offerings as well as in the private sector. While most have been follow-on financing, at least two startups with experienced management have snared significant first-round money. Among those transactions announced so far this year are:
-- Yipes Communications Inc., a major Gigabit Ethernet network provider, says its third round of private funding has closed with a total investment of $200 million, up from $139 million in October. Charter Growth Capital led the round for the San Francisco-based company.
-- Beam Reach Networks Inc., a Mountain View, Calif. company that's developing more effective antenna technology for fixed wireless access, raised $35 million in a second round of private financing. Goldman Sachs Group led the round, which included Sofinnova Ventures, Walden International, Mitsui & Co. and Berkeley International Capital.
-- NewSouth Communications, a provider of integrated communications services to businesses across the southern U.S. raised $85 million from several of its existing investors including Kohlberg Kravis Roberts & Co., First Union Capital Partners, J.P. Morgan Capital, Carousel Capital Partners, CIT Venture Capital and Wachovia Capital Associates. The Greenville, SC-based company earlier raised $170 million and plans to use the latest infusion of capital to accelerate its growth plans.
-- FiberNet Telecom Group Inc., a New York-based publicly traded company raised $28 million in a secondary sale of 6.44 million common shares and 1.29 million warrants. The provider of in-building fiber optics networks had filed a registration statement for the sale in August, seeking to raise $143 million, but called it off in December, citing poor market conditions for equity offerings. The company filed a new shelf registration in January seeking to sell up to $150 million in common stock, preferred stock, debt and warrants. Proceeds will let the company complete its planned networks in New York, Chicago and Los Angeles. The company also secured from lenders an increase in its existing credit limit to $105 million from $75 million.
--Seneca Networks, A Rockville, Md. developer of next generation optical networking equipment, raised an additional $25 million in a second round of venture financing. Investors include New Enterprise Associates, Sprout Group, Boulder Ventures, and Vertex Technology Fund. The company earlier raised $6.25 million.
--Network Telephone Corp., a private DSL-access circuit CLEC in Pensacola, Fla., obtained a $140 million senior credit facility that will be syndicated by Lehman Brothers and Lucent Technologies. The company plans to refinance $75 million in existing debt and will use the rest for working capital.
--GlobalCom, a Chicago-based CLEC, obtained $65 million in first round funding that included equity placement and a credit facility. Investors included Telecom Financial Services, a unit of GE Capital Vendor Financial Services.
--Narad Networks, a Westford, Mass. developer of next generation broadband IP infrastructure aimed at cable operators secured $41.6 million in first round financing led by Polaris Venture Partners. Narad founders Dev Gupta and Andy Chapman previously founded networking companies Dagaz and MaxComm, both of which were acquired by Cisco Network Systems Inc. 3Com Corp. co-founder Robert Metcalfe and cable modem innovator Rouzbeh Yassini, founder of YAS, have joined the Narad board.
--Coree Networks secured $30 million first round money from investors that included Mayfield, Hook Partners and Sevin Rose Funds. Coree is developing optical core packet switching systems and is headed by Chairman Michael Zadikian, co-founder of Monterey Networks. Coree is part of the Iris Group of optical networking startups launched by Zadikian to provide optical networking products for telecommunications carriers.
-- J.S.
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