One ROADM vendor -- Tropic Networks Inc. -- announced a key investment and distribution agreement with Alcatel SA (NYSE: ALA; Paris: CGEP:PA), a move widely interpreted as a vote of confidence in Tropic's technology.
But now Light Reading has unearthed details of another ROADM strategic investor. Late last year, Comcast Corp. (Nasdaq: CMCSA, CMCSK) made a strategic investment in Movaz of at least $5 million, according to sources close to the vendor.
Comcast's involvement isn't a complete surpise. The MSO holds stakes in Cedar Point Communications Inc., chip maker Intellon Corp., and other companies that it finds useful for its cable networks. Optical transport gear, such as the kind made by Movaz, is another component that has become increasingly important with the advent of video-on-demand and other high-bandwidth cable services.
Movaz's Series D funding, a round of at least $35 million, closed in November 2003 and has had subsequent closings, with additional investments, since then, the sources say.
It's tough to say how much funding Movaz has raised to date.
The company won't comment on the Comcast backing, and it hasn't announced any funding-related news since May 2002.
According to Light Reading reports, Movaz had raised at least $160 million as of December 2002. With an additional $35 million, Movaz has socked away at least $195 million to date (see Movaz Scores $60M More and Movaz Makes a Splash).
Table 1: ROADM Startup Snapshot
|Tropic Networks||May 2000||$120 million||Not disclosed.||None announced. Reportedly close to a deal with SBC Communications Inc. (NYSE: SBC)|
|Movaz Networks||June 2000||$160 million||$36.7 million in 2003||Has 46 customers, including Indiana Fiber Network and South Slope Cooperative Telephone Company|
|Source: Light Reading and company data|
Maybe Movaz doesn't want to comment because prior to 2003, it said it wouldn't need any more money. "We have a fully funded business plan with revenue coming in," Movaz CEO Bijan Khosravi told Light Reading in December 2002. "We don’t need any more cash investment, and we are well on our way to weathering the storm and becoming fully cash-flow positive." (See Movaz: Go Away, We're Fine.)
It's not surprising Khosravi's funding assessment in December 2002 was not the last word. That same month he denied talking to Lucent Technologies Inc. (NYSE: LU) about possible business combinations. "Movaz has had no such discussions with Lucent whatsoever," he said.
Two years later, the two companies announced a detailed agreement that included technology development and some amount of intellectual property sharing in order to enhance Lucent's Metropolis products (see Lucent & Movaz in WDM Deal).
Comcast did not reply to requests for comment.
— Phil Harvey, News Editor, Light Reading
For more on the booming ROADM sector, see the new Light Reading Report: Who Makes What: ROADMs.