Mavenir Systems, a company providing telecommunications gear, has raised $40 million and acquired Waltham, Mass.-based messaging software company, Airwide Solutions. The funding will help Mavenir (see disclosure) with the acquisition as well as provide opportunities for organic growth. The details of the acquisition were not disclosed, but Mavenir will integrate Airwide’s products into its own suite of mobile communications and collaboration services it offers to wireless operators.
This is Mavenir’s fifth round of funding. The round — led by August Capital and including existing investors Alloy Ventures, Austin Ventures, North Bridge Venture Partners and Greenspring Associates — brings Mavenir’s total funding to $105 million since 2005, a phenomenal amount when compared with the much smaller rounds raised by other companies offering IP-based communications.
However, unlike services such as Skype, Fring, Twilio and others that seek to deliver IP communications over the top of existing broadband networks, Mavenir wants to throw operators a lifeline to help prevent them from becoming a dumb pipe. Mavenir’s gear sits inside an operator’s network and lets it offer IP communications services like video calling, more accurate presence and other ways to make a seamless transition from the type of collaboration tools offered on wireline networks to mobile ones. The company is already working with three U.S. operators, including an announced deal with Metro PCS. The new funds will help Mavenir expand its footprint especially, now that operators are deploying faster 4G networks that can truly deliver on the promise of mobile collaboration.
During a lunch two weeks ago with Shubh Agarwal, Mavenir’s VP of marketing, he showed off some nice demonstrations of the services Mavenir Networks can provide. The video calling was especially compelling because it could run over the operator’s network or the Wi-Fi network. And by using the operator’s network, the quality was assured. If the operator’s network was unable to make the call, it didn’t offer video as an option, but would connect voice: a graceful degradation of service that’s far better than just being cut off mid-call or being unable to make a call at all.
The services also offered some nifty blocking features and a deeper granularity around availability. For example, I could be available for video calls only to my family, while on weekends, my coworkers could see me online only for voice and texts and PR people wouldn’t see me online at all. Unfortunately, Mavenir’s more granular features could end up dead on arrival if carriers don’t price them appropriately for consumer adoption — a problem in an industry where Verizon Wireless charges $10 a month for a navigation service I can get from Google for free.
Mavenir gets paid either way, since carriers have already bought the gear, but Agarwal is confident that carriers have learned from their past battling free or cheaper over the top services. He suggests that with LTE networks, the carrier has a level of control that will boost the quality and dependability of such a service and carriers will price the offerings competitively. Of course, I’ve heard this before from other gear companies and even operators, but the tidal wave of adoption is still driven by cheaper or free services.
Still, Mavenir continues to raise money, boost its offerings through acquisitions or organic efforts and sell gear to operators. Perhaps with the advent of 4G networks, operators will have a chance to change the narrative from one of good-enough, free services to high-quality, paid ones.
Disclosure: Mavenir Systems is backed by Alloy Ventures, which also backs GigaOmni Media, the parent company of GigaOM. Alloy’s Ammar Hanafi is on the board of both companies.