More money has been socked into wireless LAN (WLAN) technology. The latest recipient of cash is Vernier Networks Systems, a Mountain View, Calif.-based company that provides hardware and software to protect, manage and enhance 802.11 wireless networks. The company is expected to announce today that it has received $24.2 million in a Series C round of financing.
Vernier started looking for a $15 million infusion last January. In April, it closed on a $13 million round co-led from Allegis Capital and Financial Technology Ventures (FT Ventures). They were joined by new investor UV Partners, and Vernier’s previous investors Foundation Capital, Doll Capital Management, Masthead Venture Partners and Weber Capital Management.
“We ended up oversubscribed with a strong valuation. It was an up round. Wireless technology has taken off in unrivaled fashion and one of the first issues that needs to be addressed is security,” says Doug Klein, CEO of Vernier. “We’re fixing the problems that occur with wireless networks and adding the capabilities that users want.”
Vernier, which touts about a dozen customers, started shipping its product in September of last year and has been seeing revenue ever since. Additionally, the company expects this round to leave it fully funded, reaching profitability in the first half of 2004. The fresh capital will be used to accelerate product development, expand sales and marketing departments and fund ongoing business operations. The company has 35 employees and expects to have as many as 60 by year-end.
Allegis, which put $6 million into the round, was eagerly waiting for the right opportunity in the wLAN sector before investing. “I have been watching the space for a year and half, looking for something interesting,” says Lara Druyan, a managing partner at Allegis. “We started following Vernier and we think what they are doing is very important. It’s really enabling wireless networks to become mainstream.”
As for the future, no one could say for sure. Druyan sees endless possibilities. “I think it’s entirely possible for the company to be a stand alone, but I can also see an IPO if the equity market ever comes back. Given the space, I also wouldn’t be surprised if an acquisition takes place,” she says.
Klein says, “I always believe you need to run a company as an ongoing concern, but I could see an IPO three or four years down the road.”
Scott Wu, a managing member at FT Ventures, and Druyan will join Vernier’s board of directors.
Spun-out of Packet Design in March of last year, the company now has a total of $34.5 million in private equity. In June a slew of investors pulled together and did an $8 million round.
Contact Danielle Fugazy