Test Startup Raises $12M

Test-and-measurement startup Fanfare Group Inc. has raised $12 million to help fund its expansion as it lands new deals, brokers new industry relationships, and develops a market that, currently, it appears to have all to itself. (See Fanfare Gets Funding.)

The company, formed in 2004, has taken a different approach to the test sector by developing a software package that automates the repetitious and mundane processes involved in setting up, executing, and documenting the results of a network equipment test scenario, processes that are still mostly manual. That approach makes it complementary to the existing telecom test giants that are already signed up as partners, such as Agilent Technologies Inc. (NYSE: A), Ixia (Nasdaq: XXIA), and Spirent Communications plc .

It also makes it valuable to the equipment firms that need to run tens of thousands of product feature tests before they can ship their gear as the automation of multiple processes cuts down on time and expense.

As a result, the company, which started shipping its software in January 2006, has already signed up the likes of Alcatel-Lucent (NYSE: ALU), Brocade Communications Systems Inc. (Nasdaq: BRCD), Cedar Point Communications Inc. , Cisco Systems Inc. (Nasdaq: CSCO), and Starent Networks Corp. (Nasdaq: STAR) as users and now has a total of 28 customers, with some more "big names" about to join the list, says CEO Tom Ryan.

With the company growing quickly -- it only had six customers at the end of last year and has nearly doubled its headcount to more than 50 in the past year, including opening an R&D center in Sofia, Bulgaria -- more funds were needed, with the $12 million C round led by Focus Ventures .

Fanfare has now raised more than $25 million in three rounds, with Matrix Partners and Redpoint Ventures among its other investors.

The company is also attracting attention from service providers that need to perform re-validation tests in their own labs once they take delivery of vendor gear, says marketing VP David Gehringer. And because Fanfare's SVT creates test results that are stored and retained at each stage, carriers can retrieve digital data to send back to their vendors if any equipment problems are discovered.

Gehringer says carrier customer announcements are due to be made from "both sides of the Atlantic" in the near future.

But any kind of success is likely to attract competitive attention, and while the regular lab-based test vendors that already partner Fanfare are unlikely to expand into this area -- equipment firms and carriers prefer independent support tools that aren't tied into any one test vendor's platform -- there's a chance that rival systems might creep into the telecom sector from the IT world.

Gehringer says similar systems exist in the IT world, with big names like HP Inc. (NYSE: HPQ) and IBM Corp. (NYSE: IBM) among the firms that automate test processes and capture and analyze the results. "As we grow, it's possible they could expand their platforms to get into this [telecom] area."

— Ray Le Maistre, International News Editor, Light Reading