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Optical/IP

Kodiak Scores $15M

Push-to-talk (PTT) startup Kodiak Networks Inc. has quietly notched up a further $15 million in VC investment as it talks up an expansion of its product offering.

The unannounced deal was signed in July, with new investor Lehman Brothers stumping up the majority of cash. Existing investors Kleiner Perkins Caufield & Byers and Redpoint Ventures were also involved. The company has to date raised a total of approximately $25 million.

“We didn’t really need too much money,” CEO Craig Farrill tells Unstrung. “We are going to be profitable by the end of the year. We have plenty of revenue… In order to give us more chance to expand sales and reach what we hope to be a wave of new activity this fall, we anticipated that we needed to grow our sales team and support team globally. We are in the process of doing that.” The firm currently has around 210 employees.

Founded in November 2001, the San Ramon, Calif.-based vendor turned heads in January last year when it swept aside big-name cellular network vendors to secure a high-profile deal with Orange Communications SA for the European launch of its PTT services (see Orange Pushes Startup).

The win was Kodiak’s first customer announcement. The company now touts 16 commercial deployments, including smaller deals at Alltel Corp. (NYSE: AT), Amp'd Mobile Inc., and 3 Rivers Communications (see Kodiak Pushes Alltel, Kodiak Pushes Amp'd Mobile, and 3 Rivers Wireless Deploys Kodiak). Kodiak has also announced a bevy of software licensing deals with handset manufacturers such as Kyocera Corp. (NYSE: KYO), LG Electronics Inc. (London: LGLD; Korea: 6657.KS), Samsung Corp., and Sony Ericsson Mobile Communications (see Kodiak, Kyocera Team on PTT, Kodiak Teams With LG, Kodiak Signs Samsung, and Kodiak Wins Sony Ericcson ).

Despite its early momentum, Kodiak appears keen to break away from its status as a pureplay PTT vendor. “Some people have pigeon-holed us as a push-to-talk company,” says Farill. “We are not a push-to-talk company. We are a carrier-class voice applications company. We are trying to add things around push-to-talk, to enhance and reinforce the instant communications, real-time networking approach that we had at the beginning.”

Farrill cites the launch of applications such as voice messaging and group conferencing as evidence of its broader product base (see Kodiak Launches AVS Client and Kodiak Pushes Voice). Kodiak’s partnership with Lucent Technologies Inc. (NYSE: LU) is also focused on the delivery of voice services using IP multimedia subsystem (IMS) technology (see Lucent Resells Kodiak).

Of course, cynics will suggest that Kodiak’s new approach is an attempt to distance itself from disappointment surrounding the launch of recent PTT services. Orange is believed to have received poor levels of demand for its service, while analysts remain unconvinced of the potential of PTT technology (see Europe Stutters on PTT).

— Justin Springham, Not a Push-to-Talk Editor, Unstrung

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