Hammerhead Secures $25MHammerhead Secures $25M

MOUNTAIN VIEW, Calif. -- Hammerhead Systems, Inc., the telecom data migration company, today announced it has received $25 million in Series B financing, bringing its total funding to $43 million. Pequot Ventures led the round with new equity participation and Pequot General Partner Greg Rossmann joins Hammerhead’s board of directors. All first round VCs participated including Mayfield, Foundation Capital, and Enterprise Partners. The company also announced that it is in trials with a Tier 1 RBOC and a leading U.S.-based network service provider. Hammerhead was founded in January of 2002 and has architected its platform from the ground up to address the emerging revenue migration needs of service providers as they transition to an MPLS backbone.

“The follow-on investment from Pequot Ventures and all of our first round VCs, and the success of our trials, validate both our product and market,” said Joe Sigrist, Hammerhead’s President and CEO. “Hammerhead’s service-aware migration edge switching solutions enable service providers to seamlessly migrate revenue to an MPLS backbone and gracefully insert new corporate data services, while delivering disruptive capital and operational economics. We’re initially targeting the sweet-spot of corporate data services -- the $20 billion Frame Relay/ATM market -- which represents the carriers’ most profitable data services as well as the primary method for transporting mission critical applications among the Fortune 1000.”

“Hammerhead Systems’ approach is unique in focusing its innovations on an application that is real today, and where carriers are feeling pain,” said Greg Rossmann, Hammerhead Systems Board Director and General Partner at Pequot Ventures. “Hammerhead has a timing advantage as the only company targeting revenue migration for corporate data services – a critical problem that carriers need solved. We invested in Hammerhead because they have a deep understanding of the carrier space, built a very strong team, exceeded their product development milestones as validated through multiple trials, and have tangible customer traction.”

“Carriers are looking for pragmatic solutions to protect and grow their huge and highly profitable Frame Relay investments. Hammerhead is at the forefront of the new carrier network economics with their migration edge switch. There’s little cost left for the carriers to slash -- Wall Street won’t fund a greenfield, and they can’t afford to abandon their most profitable enterprise customers as they migrate data services revenue to an MPLS backbone,” said Kevin Fong, Hammerhead Systems Board Director and Managing Partner at Mayfield. “Hammerhead has tapped into this huge market in transition, one that incumbent equipment suppliers have clearly ignored. The market is responding to Hammerhead’s innovations through the validation of their customer trials.

Hammerhead Systems Inc.