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Ultra-Broadband

BroadLight Bags $12M More

BroadLight Inc. , the leading supplier of semiconductors and software in the very crowded GPON market, has closed a fifth round of venture funding worth $12 million.

The series E round of funding was led by Benchmark Capital , which now joins Azure Capital Partners , Broadcom Corp. (Nasdaq: BRCM), Cipio Partners, Delta Ventures Ltd. , Israel Seed Partners , Motorola Ventures , Star Ventures , and Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA) as an investor in the company.

BroadLight is the market leader and has the two biggest GPON customers in North America -- AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ). So why then does it have to keep raising money?

One possibility is the regulatory struggles that its two biggest customers have faced in deploying video services, which has in turn delayed the deployment of GPON. (See State Video Franchise Push Grows.)

"It's taking a while," says Tim Kellis, an analyst with the Stanford Financial Group who covers the PON chip space. "The reality is, in order for the service providers to offer video, they need local approval."

Kellis also notes that the longer it takes for the move to GPON to happen, the greater the risk BroadLight faces from competition and thus the greater need for funding. The GPON space in North America is crowded as it is and several new players have entered the market this year. (See Mindspeed Joins GPON Race and Ikanos Joins GPON Arms Race.)

BroadLight could not be reached for comment on this story.

— Raymond McConville, Reporter, Light Reading

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ftthexpert 12/5/2012 | 3:02:57 PM
re: BroadLight Bags $12M More GPON is being deployed everywhere. Look what FT and Cegetel are doing in France, BT in UK as part of 21Century, TI in Italy and others in EU.
Look in Kuwait and ETISALAT in UAE.
Follow Telefonica in Spain and Brasil, Singtel in Singapore and Hanaro in Korea.
Try to listen to CTC and CNC in China for their real volumes or BSNL in India. Please do not look at NTT. This is the only successful EPON project.
Look on how many Telecom vendors are promoting GPON - ALU, Huawei, ERIC, NSN, TLAB, MOT, ZTE, Hitachi - Any Tier 1 is missed ?
Look how many established Silicon vendors started a GPON product and gained traction ? Any one but BroadLight and FSL ? Where is AMCC, Where is IFX?
Pete Baldwin 12/5/2012 | 3:02:57 PM
re: BroadLight Bags $12M More I know it's a series E, but this seems like a sensible funding. PON chips seem a pretty good bet, especially since the big players haven't made a mark yet.

The deal doesn't strike me as a head-shaker, anyway.
Mark Sebastyn 12/5/2012 | 3:02:57 PM
re: BroadLight Bags $12M More I think Tim Kellis has it backwards. Broadlight is a strong supplier of Bpon silicon to Tellabs. Tellabs does not have the the lions share of GPOn business in the US, nor does Broadlight have the lions share of GPON chip business.

The longer the BPON transition takes, the better for Broadlight, since they have the revenue today.

Thoughts? Have I got it backwards?
rjmcmahon 12/5/2012 | 3:02:56 PM
re: BroadLight Bags $12M More Uhmm, the propaganda is getting worn out and a bit thin.

One possibility is the regulatory struggles that its two biggest customers have faced in deploying video services, which has in turn delayed the deployment of GPON.

Nobody is getting in the way of telco TV. It's just a terrible business case particularly when compared to milking the existing cash flows for as long as they can. Blaming the regulator or local officials is complete BS.
Raymond McConville 12/5/2012 | 3:02:56 PM
re: BroadLight Bags $12M More I think the government regulations have absolutely slowed down telco TV. 15 months just to get approval in one small town? And then multiply that by 100s for each state? It's definitely a hurdle.
Raymond McConville 12/5/2012 | 3:02:56 PM
re: BroadLight Bags $12M More As far as I knew, they were the GPON leader in which case a move to GPON would work to their advantage. I'd be interested to know though why they would need a fifth round of funding if they have such a strong BPON business going today.
bollocks187 12/5/2012 | 3:02:54 PM
re: BroadLight Bags $12M More Please,,,,,

ATT and Verizon are linked to the govt.

They are part and parcel of the delay in deployment - let me see unbundling and anti-competitive tactics.

bollocks187 12/5/2012 | 3:02:54 PM
re: BroadLight Bags $12M More The need money to survive !

The CEO was one of the key guys that was behind the buying spree done by Siemens plus some other dubious business decisions, that finally resulted in the selling of Siemens comms. to Nokia.

bollocks187 12/5/2012 | 3:02:54 PM
re: BroadLight Bags $12M More Hi So called expert,

GPON is not as widely deployed as EPON even if you exclude Japan.


rjmcmahon 12/5/2012 | 3:02:54 PM
re: BroadLight Bags $12M More I think the government regulations have absolutely slowed down telco TV.

We all have beliefs that aren't based in reality, whatever that is ;-)

15 months just to get approval in one small town? And then multiply that by 100s for each state? It's definitely a hurdle.

T got u-verse in my town and it didn't take anything close to 15 months. Rather, the city council member responsible for negotiating the deal was written up in the local paper as doing great things for the community.

Not a mention the whole project merely appeases a flock without sufficient critical thinking skills to recognize the difference between building yet another silly ideological temple vs a university.

"The lord is my shepherd, I shall not want."

Pretty much a bunch of helpless BS by my book as being a sheep doesn't appeal to me ;-)
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