Force10 Rakes In $41M
No new investors contributed to this round of funding. But all the previous investors participated, including New Enterprise Associates (NEA), U.S. Venture Partners, WorldView Technology Partners, Amerindo Investment Advisors Inc., and Pacesetter Capital.
The last time the company received funding was in July 2001 when it got $95 million. This latest round will fully fund the 225-person company, which is expected to reach cash-flow break-even by the end of year, says Mullaney. But he also adds that the company, which now has 20 paying customers, would have been able to achieve its financial goals with only $25 million in additional funding.
“If you can get money in this kind of environment, you take it,” he says. “It’s nice to have a buffer. You just don’t know what’s going to happen to the market and the economy in general. It’s better to be safe than sorry.”
Although he wouldn’t discuss details, Mullaney says that the company’s valuation has taken some hits. But he is encouraged that it has maintained its value as much as it has over the past year and a half.
Force10’s Ethernet switches go head to head with gear from Cisco Systems Inc. (Nasdaq: CSCO), Extreme Networks Inc. (Nasdaq: EXTR), and Foundry Networks Inc. (Nasdaq: FDRY). Just last month Force10 challenged its competitors to a pricing war when it announced it was slashing prices on its 10-Gbit/s Ethernet interfaces by as much as 44 percent (see Force10 Slashes 10-GigE Pricing).
— Marguerite Reardon, Senior Editor, Light Reading