Optical/IP Networks

Axerra Scores Extra Funding

Pseudowire specialist Axerra Networks Inc. got a boost yesterday with an announced $16.25 million in funding.

Axerra announced the Series C funding yesterday. The round included new investor Carmel Ventures. And Carmel partner Shlomo Dovrat -- also chairman of ECI Telecom Ltd. (Nasdaq: ECIL) -- will take a seat on Axerra's board (see Axerra Secures $16.25M).

Other investors in Series C included HarbourVest Partners LLC, TLcom Capital Partners Ltd., and the Zisapel brothers. (No, they're not like the Wachowski Brothers. The Zisapels founded RAD Data Communications Ltd., and Zohar Zisapel is RAD's chairman.)

Including seed funding, Axerra has raised $43.75 million since launching in 2000, says Steve Byars, Axerra vice president of marketing. Its second round, for $10 million, closed in 2002 (see Axerra Scores $10M).

The money reflects the increased interest in Pseudowires, which are a key to converging legacy TDM networks with Internet Protocol (IP) networks. Axerra -- which makes gateways -- is likely to be joined by a host of other equipment vendors applying pseudowires, not all of them direct competitors. Aggregation-switch vendor Hammerhead Systems Inc., for example, is staking its future on the technology (see Hammerhead Retools MPLS Approach).

"Where today edge router vendors dominate this market opportunity, in the future a host of new players will populate the market with approaches that integrate pseudowire technology into a much broader range of offerings, including access concentrators, metro Sonet/SDH gear, and new multiservice switches," writes Heavy Reading chief analyst Scott Clavenna in "Pseudowires and the Future of Transport and Access Networks," a report issued early this year.

Carrier interest in pseudowires is reflected in Axerra's flurry of wins lately (see Axerra Wins Cox OK, Axerra Wins Kenyan Contract, KT Powertel Picks Axerra, and NTT-AT Selects Axerra). Axerra has been mining the wireless market as well, finding applications for its gear in applications such as cellular backhaul (see Axerra Gets Pseudo-Wireless).

Axerra is part of a cluster of Israel-based companies working on pseudowires and circuit emulation. The clique includes RAD Data Communications Ltd. and chip maker Resolute Networks Ltd., the pseudowire-related merger of startups Lycium and Redux (see Resolute Nabs More Funding).

— Craig Matsumoto, Senior Editor, Light Reading

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