Celox Bags $80M Funding Round
Celox's product, the SCx 192 box, is designed to help service providers deploy IP functions, such as network-based addressing, for corporate virtual private networks (VPNs) and broadband services. Cisco Systems Inc. (Nasdaq: CSCO), CoSine Communications Inc. (Nasdaq: COSN), Lucent Technologies Inc. (NYSE: LU), Nortel Networks Corp. (NYSE/Toronto: NT), and Redback Networks Inc. (Nasdaq: RBAK) have equipment that does this as well.
But Celox says it stands out because its box operates on a grander scale. Specifically, the SCx 192 is said to support up to six million simultaneous users with interfaces ranging from DS3 (45 Mbit/s) to OC192 (10 Gbit/s) with an 80-Gbit/s switch fabric (see Celox Comes Out ).
The company also believes it benefits from the wisdom of having targeted big carriers from its inception in January 1999. "What separates us from other [companies] in this space is we've been focusing on tier-one carriers, but they've designed small products and are now using PowerPoint slides to reinvent themselves," sneers Kent Mathy, Celox's chairman and CEO.
That said, Celox is still a startup and still faces a challenge in establishing credibility with big carriers, which are more comfortable buying from established companies. Celox is well funded, but its most recent round was taken at a lower valuation that its previous rounds. Optical Oracle, Light Reading's subscription research service, recently estimated the post-money valuation of Celox's last round of funding, raised in July of last year, to be $100 million.
Mathy wouldn't divulge his company's valuation. "Let's say it's in the hundreds of millions," he says. "I'm comfortable with the fact that we were able to raise such a large round in a market like this -- that's quite a statement for us."
It's also quite a statement that Celox just installed its gear in its first trial customer lab, AT&T Corp. (NYSE: T), this week. For one thing, it shows that Mathy's former employer, a big spender on telecom gear, takes Celox's technology seriously.
The company first announced its trial win with AT&T back in January.
Also in January, Celox said it would be shipping products commercially by this summer. It now says general availability won't come until the end of the year.
The company hasn't increased its staff much in several months. It says it had 282 employees in January and has since added only three people.
Still, Celox does have a product that carriers appear to be taking seriously, and its recent funding looks enought to fuel it through shipment of that product. Mathy says Celox has three other trial customers in the U.S. besides AT&T and that it will begin installing its gear in their networks soon.
Investors in Celox include ABS Ventures, Adams Street Partners, A.G. Edwards, Apex Investment Partners, Bank One, Bay Partners, Dain Rauscher Wessels, Hexagon Investments, J.P. Morgan & Co., Pacesetter Capital, Pilot House Associates, Rosewood Capital, SG Cowen Securities, Texas Pacific Group, and Thomas Weisel Partners.
- Marguerite Reardon, Senior Editor, and Phil Harvey, Senior Editor, Light Reading
Editor's Note: Light Reading is not affiliated with Oracle Corporation.