Of all technology sectors, there is none which has suffered more during the big bust than telecom. The news of telecom start-ups fizzling out continues even today, but there seems to be some light at the end of the tunnel.
Phone companies, cellular operators and broadband service providers are slowly, cranking up their spending, either rolling out new services or simply upgrading their networks to handle more traffic and users. Service providers are willing to open their wallets for newer technologies like VoIP, fixed wireless, IPTV, wireless-wireline convergence, ADSL2 and VDSL.
The willingness to spend is one of the main reasons why venture capitalists are cautiously returning to the telecom sector. And that’s not taking into account mega investments in VoIP service providers like Vonage. Last week, PicoChip, a wireless chip start-up raised $20.5 million. Now comes news that Ottawa-based Meriton Networks has raised a whopping $54 million. That is one of the biggest funding rounds for a telecom start-up, an optical start-up no less. The company which was started in the dark days of 2000 as EdgeFlow, but then changed its tune, and recently hit a home run when it snagged a piece of the BT’s 21st CN Network RFP, with help of investor, Fujitsu. The company makes WDM gear used in the metro area networks. “I think our timing is extremely good and frankly the funding reflects that, because the investors look very closely to ensure themselves that it wasn’t just a blip and that it really was sustainable market growth,” chief executive Mike Pascoe told Reuters.
Here is a list of others who raised telecom VC dollars in June 2005.
- Sentito Networks, $10 million
- Soma Networks, $50 million
- Level5 Networks, $30 million
- HelloSoft, $16 million
Bottomline – the pendulum is starting to move back towards the center, when it comes to VC dollars.