GiantLoop Network Inc. announced a giant funding round today: $120 million from the likes of Greylock, Pilot House Ventures, Cabletron Systems Inc. (NYSE: CS), Nortel Networks Corp. (NYSE/Toronto: NT), Sycamore Networks Inc. (Nasdaq: SCMR), and 360networks Inc. (Nasdaq: TSIX; Toronto: TSX.TO) (see GiantLoop Lassos $120 Million). EMC Corp. (NYSE: EMC) founder Roger Marino also participated in the round.

A big deal? Sure enough. Giant Loop says all its funding so far -- $160 million to date -- has been in the form of hard dollars as opposed to equipment leases, vendor financing, and other such balance-sheet slight of hand.

GiantLoop is targeting large enterprise companies by offering to simplify their connections to storage area networks, mainframes, and other data repositories across a single corporation-wide optical network. The company also leases dark fiber from other carriers so it can create mini-MANs (metropolitian area networks) for companies (see GiantLoop Closes on $40 Million).

While GiantLoop's funding is nothing to sneeze at, it isn't as well funded as some other new service providers that are also selling IP services to businesses. Telseon, backed by vendors Cabletron Systems Inc. (NYSE: CS) and Foundry Networks Inc. (Nasdaq: FDRY), has $261 million in total funding, at least $75 million of which is lease financing (see Telseon Scores $175M in Funding).

Yipes Communications Inc. has $291 million in total funding and, though it counts Extreme Networks Inc. (Nasdaq: EXTR), Juniper Networks Inc. (Nasdaq: JNPR), and Riverstone Networks as investors, none of its funding comes from debt or vendor financing (see Services Push Toward Pure IP).

"You want to build debt on top of cash," says Yipes spokesman Jonathan Marshall. "People aren't going to lend you money if there's no money behind you."

IntelliSpace, a five-year-old EtherLEC whose backers include J.P. Morgan & Co., Weston Presidio Capital, and Cabletron, says its $100 million in total funding to date hasn’t included vendor financing (see $60M to Fuel IntelliSpace Expansion).

Cogent Communications Inc., whose backers include Broadview Capital Partners, WorldView Technology Partners, and Jerusalem Venture Partners, has $396 million in total funding, but only $116 million of that is cash. The remainder is vendor financing from Cisco Systems Inc. (Nasdaq: CSCO) (see Cogent Banks on T1 Replacement).

Jon Oltsik, GiantLoop’s vice president of corporate marketing, says his firm’s heavyweight customers will make up for its funding deficiency. “Our average customer will spend between $100,000 and $200,000 a month with us,” he explains. “We don’t need as much to invest in our network buildout because, by working with biggest of the big companies, we’ll acquire common pieces of infrastructure along the way.”

GiantLoop currently has 15 customers and 300 employees, but it's only doing network buildouts for four of those customers right now. About one third of GiantLoop employees work on consulting projects, helping business customers plan and design optical networks, especially pertaining to storage area networks and enterprise systems.

-- Phil Harvey, senior editor, Light Reading http://www.lightreading.com