Celox Networks Nets $68 Million

Celox Networks Inc. doesn't exactly fit the standard networking startup formula. It has origins in St. Louis, MO, and it operates development centers in Hudson, MA, and Bangalore, India. Even the company's name--oblique and industrial-sounding--is a little different (the company says it comes from the Latin word for "swift").

That hasn't discouraged the venture capitalists, however, who are expected to announce a $68 million second round of funding for the company tomorrow (July 12). It's led by ABS Ventures and other investors include Goldman Sachs (NYSE:GS), Pilot House Associates, Rosewood, Storm Ventures, and Texas Pacific Group.

The company is developing a "carrier-class IP services switch," according to the president, Kent Mathy. Such devices have been sought after by telecom carriers as a way to create value-added network services--and new revenue streams--such as virtual private networks (VPNs).

Mathy says his switch will be more scalable and reliable than existing developments in this field, from vendors such as Shasta Networks (acquired last year by Nortel Networks Inc. [NYSE, TSE: NT]), Cosine Communications (recently filed for an IPO), and Spring Tide Networks. Celox will be ready to deliver trial products by the end of the year, Mathy adds.

The box will be electrical, but Mathy spins it as an optical play because it will work in conjunction with optical devices to enable carriers to deploy IP services.

One key player includes founder Dr. Manju V. Hegde, who is acting as Chief Technology Officer. Hegde is a professor of Electrical Engineering at Washington University in St. Louis.

The other prominent excutives at the company include:
-- Hugh Kelly, senior vice president, marketing and sales, who was most recently vice president of marketing for Visual Networks Inc. (Nasdaq: VNWK)
-- Curtis Davis, vice president of engineering, founder and chairman, who was a former director of business development at Minmax Technologies Inc. (no Web site)
-- Jean Pierre Bordes, chief software architect and founder, who was a former principal designer at Meridian Technology Corp. (now called Ajillus Inc.).

--R. Scott Raynovich, Executive Editor, Light Reading (http://www.lightreading.com)