& cplSiteName &

Entrisphere Scores $75M Round

Light Reading
News Analysis
Light Reading
5/9/2005
50%
50%

In the race to drive profitable carrier services down last-mile access networks, Entrisphere Inc. has just topped off its tank with a whopping $75 million Series C financing round, its third in five years (see Entrisphere Closes $75M Round).

"We're going after the top tier of customers here… and this is an appropriate sized round for that," explains Don McCullough, Entrisphere's VP of marketing.

Entrisphere, which makes a multiservice broadband access loop carrier platform device thingy (MBALCPDT) called the BLM 1500, is in the business of delivering voice, video, and data services down last-mile pipes (a.k.a. first-mile pipes), and it doesn't matter if the carrier's access network is made of old copper, new fiber, or some combination of the two. In a 7-foot telco rack, three BLM 1500s can support up to 4,032 POTS lines, or 2,016 ADSL2+ lines, or 672 Ethernet lines (see Entrisphere Launches Flagship Device).

The vendor is most often compared with Calix Networks Inc. in terms of device functionalty. But while Calix is targeting smaller carriers and working its way up to customers such as Sprint Corp. (NYSE: FON), Entrisphere is aiming straight for the top, targeting only the largest 20 or 30 telecom carriers or cable networks in North America (see Calix, Entrisphere Sprint Forward).

That strategy sounds a bit nutty, given that the biggest carriers -- the ones with the most spending dollars and the largest access networks -- have already declared their equipment vendor choices for their next-generation access networks, and Entrisphere didn't make the cut. (See Alcatel, Redback Score at BellSouth, Moto Gets a Piece of Verizon FTTP, and Mais Alors! Alcatel Bags $1.7B SBC Deal .)

But the vendor's CEO, Mark Floyd, says that with all the permutations possible in a triple-play last-mile network, "the game isn't over just because something was announced in the press.

"There will be second sources to all of those vendors that have been announced," he says, adding that "not one access architecture will hit 100 percent of the users in any network."

With that "it ain't over 'til it's over" strategy guiding its big carrier sales, Entrisphere has continued to sock away cash, having raised $171 million to date. Its latest round was led by VantagePoint Venture Partners, with participation from Entrisphere's entire exisiting investor group (see Entrisphere Nabs Siemens Exec).

Floyd says the money will to go expand customer support, manufacturing operations, product development, and other functions, but he's not hiring everyone all at once. "Right now, we're staffed at the appropriate levels," he explains.

The company is so convinced it can help big carriers make a difference, it has even entered the frighteningly low-margin optical network terminal (ONT) market -- the same equipment area that gave Tellabs such fits that it had to go buy a startup just to keep its technology up to date (see Tellabs Vacuums Up Vinci).

Floyd, for one, has been down this road before. He led Efficient Networks in the DSL modem business -- another overcrowded, low margin equipment area -- against some big competitors (Alcatel) in some big accounts (SBC). (See A New Boss for Siemens ICN).

Additionally, Entrisphere says it has some tricks that may help it move in where other ONTs have faltered.

"We think we have some good ideas for how to improve ONTs," says marketing chief McCullough. Those include allowing for longer cable runs between the power supply and the ONT itself, and enabling the ONT's electronics to be removable from the ONT housing -- a carrier perk for households that move, change service, or just don't want to use the advanced services within their reach.

Entrisphere's point, as McCullough explains, is that it makes sense for carriers building fiber connections to homes to have the option of using a device that can deliver up to 100 Mbit/s of bandwidth. He says carriers delivering IPTV with HDTV channels will need "something north of 25 Mbit/s per home". But later, evolving data and video services will translate to a bigger bandwidth need.

The ONT business, like all of Entrisphere's work, may take some time to catch on. "We won't be profitable with the first units," McCullough says, "but we expect it to be an attractive business long-term."

Likewise, chasing the world's largest equipment vendors in the access market isn't for the faint of heart -- nor is the startup looking for a quick and easy shot at liquidity. "I don't think we would have raised this type of money if we weren't serious about being a long-term player in this industry," says Floyd.

Entrisphere, which just made its product public last year, has announced two customers and has reportedly been linked to a major access RFP at Sprint, where Lucent Technologies Inc. (NYSE: LU) is serving as its supply partner. Competitor Calix, while going after smaller accounts, has more than 150 service provider customers and is booking revenues at a rate of more than $100 million a year.

Separately, today, Entrisphere announced it has added Cynthia Ringo to its board of directors. Ringo, who served as CEO of CopperCom, and, briefly, Pluris, is now a managing director of Vantage Point Venture Partners.

— Phil Harvey, News Editor, Light Reading

(4)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
firstmile
50%
50%
firstmile,
User Rank: Light Sabre
12/5/2012 | 3:15:57 AM
re: Entrisphere Scores $75M Round
75M Series C...
Calix is getting the small customers...
Alcatel is getting the big customers...
But we are hoping to get some scraps...and at very low margins...
yikes!!!!

Who are there current customers and how much revenue are they currently doing?
...first
007engineer
50%
50%
007engineer,
User Rank: Light Beer
12/5/2012 | 3:15:52 AM
re: Entrisphere Scores $75M Round
IMHO, these VCs are thinking straight - they got a good product, there is a market need, great engineering team. Give them a push over the last mile and they could win this race...

Or may be the VCs know that someone is going buy them out soon(CSCO, LU, ALA), or they got some other tricks up their sleeves they haven't announced yet (another use for their hw). Don't count philw out at any time - he is as good as they come.

It is not 1999 - and when VCs write such a big check, you can bet they know something we don't :)

...and no, I don't work there.
-007engineer.

dodo
50%
50%
dodo,
User Rank: Light Beer
12/5/2012 | 3:15:50 AM
re: Entrisphere Scores $75M Round
"It is not 1999 - and when VCs write such a big check, you can bet they know something we don't :)"

I will bet that they still don't know. I tend to agree with the original poster. The giveaway of money has shifted from Optical to access. Everyone and his brother are vying for this segment but it ain't going to be easy for a start-up that can't grab the interest and wallet of the major carriers-whose MO is to go with a company which has already proved itself.

canttakemore
50%
50%
canttakemore,
User Rank: Light Beer
12/5/2012 | 3:15:39 AM
re: Entrisphere Scores $75M Round

it does not matter who is thinking what. But what are the employees thinking? In this era, with 175mil of funding, how much company does an engineer own. 0.1%, 0.05% .....

Engineers, you can do your calculations. if the company goes for 500 mill, how much you will make. What if it goes for less. After 5 years of hard work do you see the end. Or is it going to be another 5 in the boiler room.

Featured Video
From The Founder
Light Reading is spending much of this year digging into the details of how automation technology will impact the comms market, but let's take a moment to also look at how automation is set to overturn the current world order by the middle of the century.
Flash Poll
Upcoming Live Events
November 1, 2017, The Royal Garden Hotel
November 1, 2017, The Montcalm Marble Arch
November 2, 2017, 8 Northumberland Avenue, London, UK
November 2, 2017, 8 Northumberland Avenue – London
November 10, 2017, The Westin Times Square, New York, NY
November 16, 2017, ExCel Centre, London
November 30, 2017, The Westin Times Square
May 14-17, 2018, Austin Convention Center
All Upcoming Live Events
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
Muni Policies Stymie Edge Computing
Carol Wilson, Editor-at-large, 10/17/2017
'Brutal' Automation & the Looming Workforce Cull
Iain Morris, News Editor, 10/18/2017
Is US Lurching Back to Monopoly Status?
Carol Wilson, Editor-at-large, 10/16/2017
Pai's FCC Raises Alarms at Competitive Carriers
Carol Wilson, Editor-at-large, 10/16/2017
Worried About Bandwidth for 4K? Here Comes 8K!
Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation, 10/17/2017
Animals with Phones
Selfie Game Strong Click Here
Latest Comment
Live Digital Audio

Understanding the full experience of women in technology requires starting at the collegiate level (or sooner) and studying the technologies women are involved with, company cultures they're part of and personal experiences of individuals.

During this WiC radio show, we will talk with Nicole Engelbert, the director of Research & Analysis for Ovum Technology and a 23-year telecom industry veteran, about her experiences and perspectives on women in tech. Engelbert covers infrastructure, applications and industries for Ovum, but she is also involved in the research firm's higher education team and has helped colleges and universities globally leverage technology as a strategy for improving recruitment, retention and graduation performance.

She will share her unique insight into the collegiate level, where women pursuing engineering and STEM-related degrees is dwindling. Engelbert will also reveal new, original Ovum research on the topics of artificial intelligence, the Internet of Things, security and augmented reality, as well as discuss what each of those technologies might mean for women in our field. As always, we'll also leave plenty of time to answer all your questions live on the air and chat board.

Like Us on Facebook
Twitter Feed
Partner Perspectives - content from our sponsors
The Mobile Broadband Road Ahead
By Kevin Taylor, for Huawei
All Partner Perspectives