Transmode Gets $15M More

Sweden’s Transmode Systems AB today announced the completion of a $15 million round of financing (see Transmode Raises Extra $15M).

The extra cash brings total funding to $43 million and appears to reflect an upbeat mood about the direction the CWDM equipment pioneer is taking towards international expansion and towards a broader product portolio.

The new funding is an “up round,” according to Michael Crossey, Transmode’s VP of marketing and business development. In other words, it values the company at a higher (but undisclosed) figure than that used in previous rounds. The latest round also includes a new investor, Harbour Vest Partners LLC. Existing investors -- Amadeus Capital Partners Ltd., Pod Holding, and European Equity Partners -- also participated.

Crossey says the following factors might have helped in raising the extra cash:

  • Transmode says its signed a deal with a major OEM that will resell the micro multiservice provisioning platform (MSPP) it launched last summer (see Transmode Branches Out). “The deal is done,” says Crossey. It’s just a question of announcing it at an opportune moment. The OEM didn’t participate in the latest round of funding. Crossey says the timing wasn't right for such a move; Transmode didn’t want to have the direction of its product developments constrained by a strategic investor. In the past Light Reading has speculated that the OEM in question is Alcatel SA (NYSE: ALA; Paris: CGEP:PA).

  • Expansion in North America and Asia: A VP of sales for North America has been hired and will be named in January. The company has already opened an office in Singapore, and is recruiting value-added resellers in both regions of the world.

  • Further unidentified product developments are to be announced in January.

  • Continuing commercial success: Transmode has doubled its revenues this year, to a little over $10 million, having tripled sales in 2003 (see Transmode Triples Sales in 2003). It now has between 60 and 70 customers, including a number of mid-size European service providers.

    — Peter Heywood, Founding Editor, Light Reading

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