Investors Supply $53M To Infinera

Optical transport system technology developer Infinera Corp. closed its Series D round with $53 million. The funding brings the Sunnyvale, Calif.-based company’s total raised to over $130 million.

Infinera, formerly called Zepton Networks, develops small integrated photonic circuit chips that allow communications companies to receive high-speed Internet access at lower prices.

Mobius Venture Capital, a new investor, led the round with a $20 million investment and was joined by other new investors Argonaut Private Equity, Ontario Teachers’ Pension Plan (OTPP) and RWI Group. All of the company’s previous investors participated in the round as well, including Accel Partners, Agilent Ventures, Applied Materials Ventures, Benchmark Capital, Juniper Networks, Kleiner Perkins Caufield & Byers, Sutter Hill Ventures Venrock Associates and Worldview Technology Partners, among others.

Infinera originally set out to raise a smaller round of about $40 million. It may receive upwards of $60 million once the tranche-filled smoke clears.

“Coming in as the lead investor, we thought the company should have more of a cash cushion,” says Gary Rieschel, executive managing director with Mobius and new Infinera board member. “While we’re confident of the telecom market recovering next near, we didn’t want to put less than $20 million in the company.”

Rieschel says that Mobius is betting on an overall telecom spending recovery, which Infinera will need to create revenue growth.

Infinera will use the funding for working capital and for upcoming customer trials, although it’s maintaining its trademark silence as to how products actually work. “It’s not just anyone who buys these products,” says Mark Yip, vice president of marketing with Infinera. “We have a very select number of customers and we know who they are and we talk to them directly.”

Investors do not expect Infinera to come calling for more capital anytime soon. Any money in the future would be for expansion, says Rieschel.

“I don’t think there’s any more money that needs to be raised pre-revenue,” he says.