Force10 Round Hits $113M

Force10 Networks, just two weeks after bringing in over $50 million in Series F funding, has racked up an additional $60 million as part of the same round, according to documents filed with the SEC. (See Force10 Takes $51 Million.)

The 10-Gbit/s Ethernet switch specialist quietly clinched the first slice of funding a couple of weeks ago, raising over $50 million in an equity offering to 43 investors. A document filed with the SEC a few days ago reveals that the firm has significantly extended the scope of this offering, bringing in more than $113 million from a total of 63 investors.

Execs at Force10 refused to comment on the round, which brings the vendor's total funding to north of $400 million and once again casts a spotlight on its IPO plans. (See Force10 Orders One More Round and Force10: Where's the Exit? .)

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materialgirl 12/5/2012 | 3:15:19 PM
re: Force10 Round Hits $113M The number of investors in these deals, as well as the amount of money, especially in late "F" rounds, ("D" used to stand for "dog" rounds) is unheard of. It probably shows on one hand how sick the US IPO market has become after the GOP hounds have regulated it to death (while still letting deadbeat boards and management teams off the hook). GOOG must be buying tons of these boxes or something, because why else is this honey attracting so many bees. They aren't behind any IPTV deals are they?
paolo.franzoi 12/5/2012 | 3:15:19 PM
re: Force10 Round Hits $113M

I think you have it entirely backwards. The real question is why VCs keep pumping money in. Let's use Calix as an example. In a buyout, the company is said to want $2.1B. In current times, unless you can find $2.1B of discounted cash flow there is no point in buying them. However, the growth story is limited and therefore they will not get anywhere near that valuation on a public market. Unless, of course, Ericcson shows another round of stupidity.

As for Force10, they are on borrowed time. They seem to have a technological lead that will be overcome in time by the likes of Foundry and Cisco. After that, they have no value. So if I was investing part of that $113M, I either want a large chunk of the company or have lots of surety that a "liquidity event" is right around the corner. If Force10 is a private company 2 years from now (not either bought or public), the investors will be very unhappy.

materialgirl 12/5/2012 | 3:15:14 PM
re: Force10 Round Hits $113M Dear seven:
Perhaps Force 10 is doa, I don't know. What amazes me is the huge number of investors and the late late rounds. This is new, since in the old days an "F" round would be a sorry cramdown, dominated by old investors, not attracting new ones. Very strange.
tsat 12/5/2012 | 3:15:14 PM
re: Force10 Round Hits $113M
It is starting to sound a lot like Caspian's funding toward the end of their life. Oh well, best of luck F10. Does F10 have more revenue than Caspian had at this stage?
lyvewire 12/5/2012 | 3:14:41 PM
re: Force10 Round Hits $113M Does a new sign mean that they are getting new customers? Maybe not.... $100 million + funding round sounds like a they may go down like a "procket"
Hanover_Fist 12/5/2012 | 3:14:03 PM
re: Force10 Round Hits $113M Force10 suffers from IPO-envy...although they make a really great product, they're too late to the party and unable to break out of their market. Do they really do something radically different than the established players?

I'd venture that they've now priced themselves out of the aquisition market - if they are really truly serious about an IPO exit strategy, they need strong, growning quarterly revenues along with accelerating profits to wet the investor appetite.
bo knows optics 12/5/2012 | 3:14:02 PM
re: Force10 Round Hits $113M Force10 can always buy their way into the public markets the same way Zhone did.
Only problem is finding a public company with $200 million in cash and a group of executives with loans that need to be forgiven.
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