Starent Aims for $115M IPO
The mobile data core equipment vendor, which is now deployed by more than 60 carriers in 25 countries, did not provide a potential share price range or say when it might float its stock. (See VIVO Extends Starent Deal, Starent Shines at Verizon, Starent Zapps Into Europe , Starent Networks KDDI, and Starent Confirms Virgin Deal.)
Starent's ST16 core wireless router platform can de deployed as either a PDSN (packet data serving node) in CDMA networks or a GGSN (gateway GPRS support node) in GPRS/UMTS/WCDMA networks to manage wireless data traffic, perform subscriber session management, and undertake billing functions. The ST16 was recently deployed in an IP Multimedia Subsystem (IMS) test scenario, acting as a Call Session Control Function (CSCF) network element. (See Starent in IMS Plugfest.
It has raised about $98 million since 2000 from a number of investors, including Highland Capital Partners , North Bridge Venture Partners , Matrix Partners , and T-Mobile Venture Fund . Its most recent round was $18 million, which closed in September 2005. (See VCs Shine on Starent and Starent Secures Investment.)
The vendor says it achieved profitability in 2005, and generated $3.6 million of net income from revenues of $94.4 million in 2006.
The company has relied heavily on its OEM relationships (two separate agreements, one for CDMA and one for GSM/UMTS) with Nortel Networks Ltd. , which generated more than 40 percent of its revenues last year, and its deployment at Verizon Wireless , which accounted for more than 30 percent of revenues in 2006.
Now, though, the company is shaking up its sales strategy and has actually terminated its OEM relationships with Nortel to enable it to broker more direct sales with carriers. (See Nortel Mothballs Shasta.)
Starent says it's looking to expand its existing relationships with its customer base, add to its direct sales force, and broker new OEM deals with vendors and integrators, and may even make new arrangements with Nortel that are less restrictive than the previous deals. The company believes a "significant opportunity for growth is from sales to GSM/UMTS operators as they continue to transition to high-bandwidth networks."
Starent, which survived as an independent startup while many other wireless data gateway hopefuls fell by the wayside, considers its main rivals to be Cisco Systems Inc. (Nasdaq: CSCO), Ericsson AB (Nasdaq: ERIC), Nokia Corp. (NYSE: NOK), and UTStarcom Inc. (Nasdaq: UTSI). (See Wireless Router Startups Wither.)
— Ray Le Maistre, International News Editor, Light Reading