FPGA-based processor specialist Ethernity Networks has raised £15 million (US$19.5 million) from an IPO on London's Alternative Investment Market (AIM) and says the funds will help it meet demand from major systems vendors that want to build their products around its data processing capabilities.
The Lod, Israel-based chip vendor began trading in AIM Thursday morning (stock code ENET) with a placing price of 140 pence per share, giving it a market valuation of £45 million ($58.4 million). By 1 p.m. London time the shares were trading at 152 pence.
The company says the proceeds will be used to: strengthen its balance sheet, so it can meet the "financial strength requirements" of major systems vendors such as Cisco Systems Inc. (Nasdaq: CSCO) that only want to deal with financially-secure suppliers; invest further in R&D; and invest in marketing activities and participate in standards group processes.
Ethernity's pitch to the market is that its field programmable gate array (FPGA) processors are far more suited to the high data traffic volumes and unpredictable demands of virtualized network elements than ASICs (application specific integrated circuits), as they can accelerate data processing, improve efficiencies (including lower power consumption) and offer greater flexibility in terms of adding new features quickly. The company claims that its processors "can be updated, upgraded or reprogrammed in line with future network or infrastructure demands and security requirements," making them very suitable for the hardware network elements that will underpin SDN and NFV deployments.
It's not a startup, though. While the introduction of virtualization into networks offers the prime opportunity for future growth, Ethernity Networks Ltd. has already built a business supplying its products for use in current networking systems. The company has been around since 2004 and says that its "software and firmware is already installed in over 400,000 systems globally in broadband access, mobile backhaul and Ethernet access applications."
Current customers include ADVA Optical Networking, Calix, Coriant, RAD Data, Telrad and more.
"We are delighted to be admitting to AIM today and that we had such a positive response to the fundraising from new investors," said CEO David Levi in Ethernity's official IPO statement. "The fundraising and AIM listing is a major moment for Ethernity that will put the business on a greater trajectory and address an exponentially growing market. We have game-changing technology that major global network operators are demanding and the listing will enhance Ethernity's profile and strengthen our balance sheet, which is essential in order for us to fulfil tier one supply chain requirements."
To find out more about Ethernity, check out this video interview with Levi that was recorded on a recent Light Reading trip to Israel:
— Ray Le Maistre, , International Group Editor, Light Reading