Sunnyvale, Calif.-based broadband provider Alopa Networks Inc. has closed on $8.5 million in a Series C financing tranche of a $12.5 million investment that is expected to close within the next 12 months.
VantagePoint Venture Partners led the round with participation from previous investors including Summit Accelerator Fund, Lucent Venture Partners and Rainbow Fund.
Despite the trouble that the cable industry seems to be having, Manuel Henriquez, a partner at VantagePoint and Alopa’s newest board member, says the sector isn’t doing as poorly as it seems. “The industry is moving in the right direction. From a capital point of view, cable revenue is declining, but at the same time, operating expenses are being reduced and customers are getting more service,” he says. “But don’t get me wrong. It’s still a challenge. The cable industry has to go though the same shock as the rest of the economy.”
However, perhaps proving that the cable industry is on an upswing, the remaining $4 million tranche in the Series C may not even be needed.
“There is an additional layer for the taking in case they need it,” says Henriquez. “But they don’t need that money right away, and they might not even collect it.”
The company expects to use the proceeds from the round to expand its sales and marketing efforts. With offices in the United States and India, Alopa touts approximately 65 employees and is hoping to grow that number substantially by year-end.
Additionally, Alopa plans on being profitable in the next 12 months and has been seeing revenue for at least the last two quarters. Alopa’s customers include Motorola and WorldCom. Henriquez expects the
company to have some sort of liquidity event. “An IPO or an acquisition would be fine, but in this industry I think an acquisition is more probable,” he says.
Founded in September 1999, Alopa raised $1.25 million in seed money at the same time and received a post-money valuation of $6 million. Then in 2000, the company raised an additional $17 million at the same valuation.
Contact Danielle Fugazy