Innovance Quietly Raises $17M in Debt
The news broke in Monday's Ottawa Business Journal, which reported that Innovance has obtained about US$4 million of its loan from MM Venture Partners, a Toronto VC firm that last week closed a round of financing for another Ottawa startup, Tropic Networks Inc. (see Tropic Lands $10M).
MMVP has publicized the loan as part of a trio of investments in optical networking companies. The other two include Tropic and fSona Communications Corp., a wireless optical access company (see fSona Adds to Team and BT Takes Piece of fSona).
Innovance confirms this, but says it can't yet name the other participants in the financing, because it doesn't yet have their permission to do so. "They'll probably make their own announcements in a couple of weeks," says Innovance CFO Wayne Edmunds.
He plays down the loan, saying it doesn't signal any change of plans for Innovance. "We're purchasing equipment for our labs and IT infrastructure," he says. The loan will is collateralized with the firm's current assets.
Edmunds also denies there's any truth to a rumor published in the Ottawa Business Journal that Innovance is waiting to close a multimillion-dollar strategic investment.
Still, he hints there may be more news to come. "At the appropriate time, we'll make some more announcements," he notes. And he says the full story of today's loan may be tacked onto another announcement in the official company release.
For Innovance, the role of strong, silent type isn't anything new. Despite scoring record funding last year from several high-profile investors, including ex-JDSU CEO Kevin Kalkhoven (see Innovance Scores $75M ), the firm's been cagey about its doings. All it will say is that it's readying products that include core optical transport gear capable of replacing Sonet/SDH equipment.
Sources say one reason Innovance may be keeping mum is that the new loans don't match the size of VC funding in the past. Companies also may want to avoid appearing to be incurring any debt.
Still, at least one competitor in Ottawa, who asked for anonymity, says he admires the deal. "I think it is a victory to announce any kind of sizeable financing, equity or otherwise, given the mood of the VC community of late," he says. Every million dollars of funding now is likely worth $5 million in "year 2000 dollars," he quips.
— Mary Jander, Senior Editor, Light Reading