Motorola Inc. (NYSE: MOT) has made a stealth investment in Turin Networks Inc., according to sources close to both companies.

The amount of the funding is unknown, but it’s been confirmed that Motorola made a significant investment in the startup earlier this year. In addition, sources say the funding round is still open, meaning Turin may be looking to raise more money. The company has already raised a total of $130 from a range of top-tier investors that include Doll Capital Management (DCM), Sequoia Capital, and individual investor Don Green (see Green Gooses AFC).

The news indicates the two companies are tightening the relationship that began in June 2002, when Motorola agreed to resell Turin’s products, which include a line of metro networking gear that combines the functions of a Sonet ADM and Ethernet switch. The products are geared toward independent carriers and cable operators, primarily in rural areas (see Motorola Deal Plugs In Turin).

Turin is already shipping product for revenues and has more than 30 customers, according to company officials. The bulk of the customers are regional independent carriers such as Vermont Telephone. The Motorola deal could be crucial in pushing the startup towards its stated goal of profitability by the end of the year.

The deal comes at a time when it’s become increasingly important for smaller startups to forge partnerships with large OEMs that can aid with critical sales, service, and support help. Turin currently has about 150 employees, down from a high of about 200.

Don Green, a venture capitalist, founder of Advanced Fibre Communications Inc. (AFC) (Nasdaq: AFCI), and a major investor in Turin, said he is still waiting for results from the deal, but he is optimistic about the relationship.

"Motorola has to get its people trained and skilled at selling the product,” saysGreen, who is on Turin's board of directors. “So far, they've had little or no impact on revenues. But they have invested, and they have signed up for a distribution that could be quite significant."

Motorola had not returned phone calls by press time.

— R. Scott Raynovich, US Editor, and Phil Harvey, Senior Editor, Light Reading