Seranoa Scores $9M More

Seranoa Networks Inc. has raised $9 million in a "B" round of funding, which it plans to use to lure more customers.

You read that right: more customers. Someone is paying Seranoa for its WANport product, a box that groups together TDM circuits to avoid using up expensive router ports (see Seranoa Surfaces). The startup won't say who its customers are yet, though it was reported earlier this year that Allegiance Telecom Inc. (Nasdaq: ALGX), Broadwing Inc. (NYSE: BRW), and Pac-West Telecomm Inc. (Nasdaq: PACW) were among its prospects (see Seranoa's Slip Is Showing).

"We are impressed that despite a difficult market, Seranoa has signed revenue generating customers," says Tim Kraskey, managing director of YankeeTek Ventures, one of this round's investors, in a prepared statement.

Seranoa CEO Graham Pattison says the new funding will help the 40-employee company add at least 12 new salespeople and beef up distribution channels and marketing -- all to attract large carriers with legacy networks.

"Carriers are figuring out what new services to offer, but they need to save hard-earned dollars on equipment for existing services," he says. The WANport's value proposition is to save carriers money on TDM networking while they figure out what newfangled packet-based offerings they need.

Pattison says Seranoa's product isn't a stopgap kind of device. He believes the telecom market will have a slow ramp-up over the next couple of years. But carriers that have eked out capital expenditures month-by-month are at least thinking of new ways to add revenue. "There's a lot of noise now, and there wasn't even that six months ago," he says.

Besides YankeeTek, Advent International, FA Technology Ventures Corp., St. Paul Ventures, Schoffstall Ventures Inc., and several private investors all chipped in for Seranoa's funding. The company has raised $25 million to date.— Mary Jander, Senior Editor, Light Reading

TriteReading 12/4/2012 | 11:38:32 PM
re: Seranoa Scores $9M More Does Seranoa have any competitors or are they the only company making this kind of box?
Kevin Mitchell 12/4/2012 | 11:38:31 PM
re: Seranoa Scores $9M More They are really the only one in this space. Competition comes from Cisco reducing their prices or some other defensive

Seranoa could possibily hook-up with other router vendors since they share the same target and most router vendors are pushing the services and VPN angle, rather than speeds and feeds.
BobbyMax 12/4/2012 | 11:38:22 PM
re: Seranoa Scores $9M More The concept is really interesting, but I do not think yjere is much market for this kind of product.
plight_reading 12/4/2012 | 11:38:16 PM
re: Seranoa Scores $9M More Looks like their products are a competitive alternative to the channelized line cards required in edge routers. If their value proposition is valid (1/3rd the price, 5 times the capacity, multilink PPP processing, compatible with all edge routers, etc.) they could could make a serious dent in the edge router line card market.
Kevin Mitchell 12/4/2012 | 11:38:15 PM
re: Seranoa Scores $9M More Yes, with Cisco controlling 60%+ of the SP edge router market and the bulk of those revenues coming from line cards sales, then the TAM is pretty sizable.

The value proposition must be true, Seranoa probably needs some big brother partners, and Cisco has to ignore them for a while in order for Seranoa be successful.
xsiliconkid 12/4/2012 | 11:38:02 PM
re: Seranoa Scores $9M More 80% of all edge router costs go towards line cards. How big in $ is the edge router space?
80% of this is the market!
Kevin Mitchell 12/4/2012 | 11:38:00 PM
re: Seranoa Scores $9M More http://www.lightreading.com/do...

This article can give us a sense. $1.7B WW in 2002. Realistically, Seranoa is gunning for Cisco's installed base of edge routers, which is 75%+ (60%+ on a quarterly basis). So ($1.7B x 60% (Cisco share)) x 80% (line cards)s = $800M.

Seranoa is going for the WAN access cards, not the trunking and service cards, so it is probably less than 80%.

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