8/31/2009 - VentureWire
Calix Networks Inc., a maker of broadband access equipment, has lined up $100 million in new financing to capitalize on an expected boost to its business from the federal government's broadband stimulus package.
The round includes $50 million in equity from its existing investors and a $50 million credit line from Silicon Valley Bank. Foundation Capital provided the largest chunk of the round. Sprout Group, Riverwood Capital, Azure Capital Partners, CastleRock Partners, Coral Partners, Kinetic Ventures, Menlo Ventures, Meritech Capital Partners, Redpoint Ventures, St. Paul Venture Capital and TeleSoft Partners are among the participants in the round. Carl Russo, Calix's chief executive, declined to provide the series of stock or valuation of the round.
Previous investor Integral Capital Partners did not participate, Russo said. The firm could not be reached for comment.
With well over 100 of its customers submitting applications for part of the broadband stimulus program, Calix wants to "make sure we can meet their needs without stretching our balance sheet," Russo said.
Petulma, Calif.-based Calix focuses its sales efforts primarily in North America and exclusively on tier-two and tier-three telecommunications companies - basically anyone that's not AT&T Inc., Verizon Communications Inc. or Qwest Communications International Inc.
"About 40% of service providers targeted for stimulus are already Calix customers," said Geoff Burke, its senior director of marketing. The stimulus has a "specific focus on rural America, and that aligns well with our customer base."
On Thursday, the two government agencies responsible for distributing the $7.2 billion in grants and loans to increase the nation's broadband infrastructure announced that they had received almost 2,200 applications requesting $28 billion in federal money. The government is expected to hand out $4 billion toward the first round of applications.
The new round brings Calix's total financing to more than $300 million in the last decade. Despite annual revenue in excess of $250 million, the company sees "no compelling reason" to go public, Russo said.
Russo wouldn't disclose the company's total financing, but VentureWire records show a total of $260 million prior to this round, which doesn't include a $57 million Series 1 financing disclosed in filings with the Securities and Exchange Commission in 2007.
Calix makes a variety of access networking equipment that enables the delivery of broadband services, such as voice, DSL and cable, over copper and fiber networks. The company's equipment is built to enable customers to build a single access network, rather than a different access network for each service it delivers. That helps service providers add new services with less time and expense than they would ordinarily incur.
With this round, Michael Marks of Riverwood Capital and Adam Grosser of Foundation Capital will join the company's board, which also includes Paul Ferris of Azure Capital Partners, Russo and several independent directors. Robert Finzi of Sprout Group will also take over board duties for Sprout Group Partner Wayne Nemeth.