Airespace Lands Another $22MAirespace Lands Another $22M
Wireless switch startup says it raised more than it originally planned
July 21, 2003
Wireless LAN switch startup Airespace Inc. plans to announce tomorrow (July 22) that it has scored a further $22 million in a third round of funding. It says it will use the money to pump up the sales and marketing muscle behind its 802.11 networking products.
Airespace's latest round was led by Fidelity Ventures, which contributed $7.5 million to the round. All of the VC firms that have previously invested in Airespace also joined the round (see Airespace Takes Off). In total, the company has raised a shade over $38 million in funding.
"This funding will take us to breakeven," says Alan Cohen, VP of marketing at Airespace, who says that, as well as sales and marketing, the money will be used for the working capital the company needs to buy components to ramp up production of its wireless LAN management boxes and access points.
"The faster we grow, the more we have to invest," says Cohen.
Cohen says that he doesn't expect that the company will be looking for any more VC funding. "By the end of this year, revenues are going to start to make a significant contribution to our business model," he claims.
And Cohen even hints that an IPO may be the next step for Airespace but -- of course -- he can't say exactly when. "I think we'll need a year to 18 months of revenue traction under our belts to determine that," he says.
The Airespace funding is the third major chunk of cash that the VC community has flung at wireless switch startups in the last two months. Trapeze Networks Inc. gathered $34 million early in June, while Vivato Inc. scored an eye-popping $44.5 million at the end of last month.So, Unstrung asked Cohen if his company needed a bigger wad of cash to really satisfy the wireless LAN market. Cohen says that the round was actually larger than Airespace had planned it to be; originally the firm was looking for around $15 million for this round.
"We're a smaller company than Trapeze," says Cohen, although he adds that the firm plans to double in size over the next year.— Dan Jones, Senior Editor, Unstrung
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