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Mavenir's Stoke Buy: Cheap at Twice the Price?

Mavenir is shelling out just less than $5 million in cash and debt for Stoke, a company that grabbed $92M in VC funding in under a decade.

Dan Jones

November 18, 2014

1 Min Read
Mavenir's Stoke Buy: Cheap at Twice the Price?

Mavenir appears to be getting LTE security gateway vendor Stoke for a knock-down bargain price ahead of the traditional Black Friday holiday sales in the US.

Mavenir Systems Inc. revealed in an SEC filing that it is paying $2.9 million in cash for Stoke Inc. and assuming $1.9 million of the company's debt. Stoke had pulled in around $92 million in venture funding since 2005.

After it closed its final $17 million series E round in 2011, the company had even considered an IPO a "possibility." (See Stoke IPO Is a 'Possibility'.)

Stoke, after all, had high-profile operator customers such as NTT DoCoMo Inc. (NYSE: DCM) and SoftBank Mobile Corp. using its LTE security gateway. (See Mavenir Buys Stoke for Security, Small Cell.)

Learn more about strategies for keeping mobile data secure at our upcoming Mobile Networking Security Strategies event in New York on December 3.

Financial analyst Richard Valera at Needham & Co. suggested in a research note that the acquisition won't be a "major needle mover" for Mavenir, but views the buy as favorable. [Ed. note: No kidding!]

"It sounds like Stoke was running at a small loss, but MVNR expects it will be neutral to MVNR earnings in 4Q14," Valera writes.

Mavenir's ambition for the Stoke hardware platform is to make it a virtualized, hardware-independent security system in the future.

The buyout is expected to close on November 21.

— Dan Jones, Mobile Editor, Light Reading

About the Author(s)

Dan Jones

Mobile Editor

Dan is to hats what Will.I.Am is to ridiculous eyewear. Fedora, trilby, tam-o-shanter -- all have graced the Jones pate during his career as the go-to purveyor of mobile essentials.

But hey, Dan is so much more than 4G maps and state-of-the-art headgear. Before joining the Light Reading team in 2002 he was an award-winning cult hit on Broadway (with four 'Toni' awards, two 'Emma' gongs and a 'Brian' to his name) with his one-man show, "Dan Sings the Show Tunes."

His perfectly crafted blogs, falling under the "Jonestown" banner, have been compared to the works of Chekhov. But only by Dan.

He lives in Brooklyn with cats.

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