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Publication: Light Reading
Date: 4th June 2004
Title: PacketFront Bags Another 15M Euro
Swedish
broadband access system vendor PacketFront AB will announce Monday that
it has closed a 15
million Euro (US$18.4 million) third round that takes its total funding
to about 25 million Euro ($30.7 million).
The round was led by a new investor, Amadeus Capital Partners Ltd., but
included existing stakeholders European Equity Partners and TLcom Capital
Partners Ltd. "For the first time it was a pleasure to go fundraising,"
says PacketFront CEO Martin Thunman, "and while this might seem like a
small amount of capital to our peers, it's a lot of money for PacketFront."
The cash will be used to further develop its products, while expanding
its presence in North America and Japan. Last month the firm opened a
Tokyo office, and it plans to open one in Boston soon. The company will
also exhibit at Supercomm for the first time, where it will announce some
new products for operators involved in local loop unbundling.
"So
far, we have been reacting to business demand in North America, but now
we're going after it," says Thunman. He adds that reacting to demand on
an ad hoc basis is a good way to grow and minimize any risks while maintaining
"extreme cost control, but it takes a very long time to grow that way."
This
new cash round, and particularly its size, was not in Thunman's original
game plan. "But in the past 12 to 18 months, we have seen so many projects,
and we realized we needed to be more aggressive in our expansion to take
advantage of the growing market." That market growth has seen PacketFront
win a number of deals already this year, including a new one to be announced
Monday at Jordan Telecom.
Thunman
says there are now 25 revenue-generating customers and another five at
various stages of deployment, including Jordan Telecom. The company has
52 on staff, but that will rise to 60 during the next quarter.
So
what about revenues? Back in October 2002, Thunman predicted revenues
of $60 million in 2004 and $100 million in 2005. Was he accurate? So far,
unfortunately, no. "Our customers did not build out as aggressively as
we had expected. But our customers are still investing, and it's a matter
of shifting the time period to hit those figures," he says, though he
won't say what this year's income will likely be.
"The
focus now is to build a bigger pipeline of business, especially in North
America and Asia/Pacific. That should help us achieve the $100 million-a-year
revenue target within two to four years. We are in negotiations with potential
large, medium, and small customers."
The
company's main target market is still the local and regional carriers,
though, "the ones with deals worth between $1 million and $20 million
over three years."
PacketFront's
product development will focus on higher-capacity platforms and the further
development of the vendor's BECS provisioning system. "We'll continue
to innovate with BECS, and provide new functionality," says the CEO. "Carriers
want to take some of our features and integrate them with their existing
installed hardware platforms, and we're looking at how we can do that.
Next year we'll launch a new version of our ASR router that will enable
tighter interoperability with other vendors' hardware and enable carriers
to extend our service management features across their entire access network."
-
Ray Le Maistre, International Editor, Boardwatch
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