P-Cube Refuses to Choose
Last month the Sunnyvale, Calif.-based vendor stole a march on its rivals by announcing high-profile wins with wireless carriers Hutchison 3G Italy and Israel’s Pelephone Communications Ltd. (see P-Cube Strikes Double Deal).
Such success -- added to earlier deals in the cable/ISP space -- has seen the company tagged as a startup to watch in 2004 (see SingTel Uses P-Cube Gear).
Heavy Reading -- the research arm of Unstrung’s parent publication, Light Reading -- has identified P-Cube as one of the telecom industry’s “most likely acquisition targets.” The new report -- Telecom Recovery Investment Opportunities -- examines the prospects for renewed IPO and acquisition activity across a broad set of startups in the networking industry (see Heavy Reading: Startups on the Rebound).
P-Cube CEO Yuval Shahar refuses to rule out either option in the long term. “If we continue at the rate we are going, we will be in good shape,” he tells Unstrung. “When you are in good shape one of two things can happen -- you can get acquired or we could go public.”
Shahar insists the company is not “overly obsessed with either one of those” in the short term, but hints at future activity. “I have to assume I am building this for the long run. An IPO would be the leverage to take it to the next step... M&A, on the other hand, is the result of success achieved rather than a planned target for us. From an acquisition perspective, what we do has to be of strategic value.
“The key for us is to build a customer base, build out the business, and ensure we are financially successful... We will worry about IPO and acquisitions a little bit later when we are an established player.”
Interest from larger incumbent players would surprise few industry observers. “P-Cube does seem like a promising nugget,” opines Ken Rehbehn of Current Analysis. “The company’s win with Hutchison 3 suggests that they already are getting respect in the [wireless] sector.”
Meanwhile the vendor maintains belief it will hit breakeven this year, following VC funding of $70 million. “We are growing revenue quarter-on-quarter,” insists Shahar. “We are fully funded and don’t forecast the need for future funds.”
— Justin Springham, Senior Editor, Europe, Unstrung