Corona Networks Scores $40M
Corona Networks Inc. is scheduled to announce today (9/27) the closing of a $40 million funding round, proof that some investors still think there's money to be made in the telecommunications hardware business.
Led by Merrill Lynch & Co. Inc. Ventures and New Enterprise Associates (NEA), Corona's third round of funding should be enough to see the company through to "a quarter or two of revenue," according to Ramandeep Singh, Corona's president and CEO.
Corona is developing an aggregation and IP services switch, called the ISP 12000 (see Corona Intros IP Service Platform), for the network edge market. Though not scheduled to ship until early next year, Corona says the ISP 12000 is already in trials with four carriers, which Singh declined to name, assuring only that, "They're very large carriers."
They would have to be, being that the ISP 12000 will likely cost in the hundreds of thousands of dollars per box. Though none of the carriers have signed pledges to buy the product, Singh says the trials are "a good first step" toward eventual revenues.
"We're very confident we'll have customers," says Singh, who believes the network edge will be among the first markets to see any pickup in capital expenditures.
"We've talked to the largest carriers, and they have spending plans in place for the [network] edge," Singh says. "Their cutbacks have mostly been in long-haul. The edge is where we expect to see a lot of [buying] activity." Additionally, he says, the latest round of cash gives Corona enough funding to get through developing and shipping the ISP 12000, a process Corona hopes to reach by early next year.
Tom McConnell, general partner at NEA, says he will likely take over as Corona's chairman, replacing Steve Pearse. Pearse, a friend of Corona co-founder Raj Singh, is currently a more active chairman with Inara Networks Inc., another startup (see Ex-Cyras CEO Joins Roshnee Spinoff) in the Raj Singh stable. McConnell, who says his firm has invested a total of $27.2 million in Corona to date, adds that he "really believes in this team," calling them a "focused group" with a solid core of engineers and executives.
McConnell says Corona's ability to secure carrier trials was "an important milestone" for the company's investors. "We're confident that this latest round will get [Corona] to revenue shipments, and maybe even cashflow break even." McConnell also praised Corona's ability to stretch budgets. "Every dollar this company has had has been well spent," he says.
The ISP 12000, according to Corona, is designed for central office or points-of-presence deployment, between carriers' edge access and core backbone connections. Though the company's website claims that the ISP 12000 can support interfaces from 10/100 Ethernet through OC-192, the fastest links available by early 2002 will only be at OC-48, according to Alex Henthorn, Corona's senior director of product management. Henthorn says support for higher speeds will be added over time. Corona also claims that the ISP 12000 will offer built-in firewall and VPN support.
- Paul Kapustka, Editor at Large, Light Reading