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Ethernet equipment

Actelis Bags $22M

Actelis Networks Inc. announced a $22 million funding round Monday, reflecting investors' faith in the burgeoning carrier Ethernet market. (See Actelis Raises $22M.)

The round was led by Adams Street Partners, which will be represented on the Actelis board by partner Thomas C. Dolson.

The rest of the money came from previous investors, including ATA Ventures , The Carlyle Group LLC , DuPont Capital Management , Global Catalyst Partners , Innovacom , New Enterprise Associates (NEA) , Vertex Venture Holdings , and Walden International Investment Group .

Founded in 1998, Actelis, which now employs 100, has amassed $119 million in five rounds of funding. (See Actelis Draws High-Profile Investors and Actelis Raises $23M .)

The latest round is "earmarked for growing the company [to meet] the increased demand we're seeing," says the vendor's associate VP of marketing, Craig Easley.

Growing demand for Ethernet-over-copper technology was evident last year, notes Heavy Reading analyst Stan Hubbard. "We saw quite a few wins for Actelis and Hatteras Networks Inc. in 2006, and the revenue started to kick in late in the year for both of them," he says.

The biggest of those wins came in July, when Hatteras announced a deal with BellSouth, which has since been absorbed into AT&T Inc. (NYSE: T). (See Copper Ethernet Snares an RBOC.)

Actelis provides gear for delivering carrier Ethernet over copper, sharing that market with ADVA Optical Networking , ANDA Networks Inc. , Ceterus Networks Inc. , Hatteras, MegaBridge , and Overture Networks Inc. -- some of which deliver Ethernet over fiber as well as copper. Either way, there's a mass of startups involved in this market.

"The pace of innovation is so rapid in the Ethernet market that anybody that doesn't get strong partnerships and a global footprint quickly is going to be left out of the market," Hubbard says.

Hubbard notes that Actelis and prime rival Hatteras have worked different sides of that argument. Actelis has corralled a widespread list of customers, a few that have been announced, and "a couple of pretty decent sized customers" that haven't, Hubbard says. (See ONI Picks Actelis, Easynet Deploys Actelis, and COLT Deploys Actelis.)

Hatteras, meanwhile, has been lining up key partners -- again, some of which are major but unannounced, Hubbard says. Hatteras, by the way, raised its own round of funding in June. (See Hatteras Announces Agreement and Hatteras Closes $21M Round.)

More information about the carrier Ethernet market can be found at Light Reading's Ethernet Expo Europe event, to be held in London on May 2 and 3.

— Craig Matsumoto, West Coast Editor, Light Reading

Stevery 12/5/2012 | 3:16:11 PM
re: Actelis Bags $22M The latest round is "earmarked for growing the company [to meet] the increased demand we're seeing," says the vendor's associate VP of marketing, Craig Easley.

In fact, the demand is so high, that we elected to give away equity rather than monetize the PO's in this low-interest rate environment.

Very shrewd.
larytet 12/5/2012 | 3:16:11 PM
re: Actelis Bags $22M From 1998 - this is 8 years of work. Let's say 20 people in R&D and we get 80 years spent or about $16 mil in R&D costs alone. The real number is apparently higher.

I think that it took about 2 years and 4 or 5 guys to create this one http://www.megabridge.com/prod...
The box is a mux with 16 DSL links on one side and Ethernet and 4 E1s on the other.


Pete Baldwin 12/5/2012 | 3:16:10 PM
re: Actelis Bags $22M Good point, larytet, although Megabridge had the advantage of starting later. That means they had more recent technology (chips) available and a market closer to being established.

More important, it means they didn't have to experience the bubble, so they wouldn't have gotten those huge sums of money and wouldn't have had to get *more* coming out of the downturn.

Props to Megabridge, but I wonder ... if they got going that quickly, doesn't that suggest they can be displaced just as quickly in the future?
larytet 12/5/2012 | 3:16:05 PM
re: Actelis Bags $22M i do not work in Megabridge, though i did some work for them, including fairly large chunk of code in the BDSL box. I forward the link to the article to one of the founders of the company, because he is curious where all these hits come from to the co's WEB site.

I think that the guys did not use any modern chips, but just a couple of low end Xilinx chips. They do copper wires bonding at fraction of price thanks to the patented scheme allowing simple and natural implementation of load balancing.

Regarding how fast such products can be brought to the market i do not have answer.
Pete Baldwin 12/5/2012 | 3:16:03 PM
re: Actelis Bags $22M Oops. I did forget Aktino -- thanks for the mention, kevin.
kevin0425 12/5/2012 | 3:16:03 PM
re: Actelis Bags $22M 'Actelis provides gear for delivering carrier Ethernet over copper, sharing that market with ADVA Optical Networking (Frankfurt: ADV - message board) , Anda Networks Inc. , Ceterus Networks , Hatteras, MegaBridge , and Overture Networks Inc. -- some of which deliver Ethernet over fiber as well as copper. '

Don't forget others like Aktino. They use MIMO-enhanced VDSL2 in their solution versus G.SHDSL (or variants) used by Actelis and others. It's not as mature a product as Actelis', but it's definitely noteworthy.

I am currently evaluating these technologies and I will say that Actelis' product line, particularly the MetaLight product, is a good metro-ethernet solution where fiber is not an option. It's a very feature-rich product and it's not surprising to me that they got another round of funding.
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