Trendium Inc., a software developer that provides tools to help telecom companies manage their broadband needs, recently completed a second round of private equity financing last week, raising $25 million.
Mellon Ventures led the round with a $7 million commitment. Other new investors included Vertex Management, Crossbow Ventures, GKM Venture Partners and a handful of individual investors from the communications industry. Follow-on investments came from M/C Venture Partners and Trinity Ventures.
“Our company got funding in this market, which indicates that investors recognize the need for a new approach in broadband and telecommunications services,” said Deepak Swami, the Sunrise, Fla.-based software company’s chief strategy officer.
Trendium, which raised $13.5 million in its 1999 Series A round, will use its newfound funds to expand its sales and marketing teams in North America and Europe, in addition to adding more functionality and features to its products, which are being tested by several service providers.
Swami said Trendium expects to sign on customers in the very near future, and is already in talks with Europe Lucent Technologies.
He went on to say Trendium’s goal is to become self-sustaining by late 2002. “At that point we will entertain additional equity as an option or public placement but I can’t tell for sure right now.”
Ravi Ugale, vice president of Crossbow Ventures, which contributed $2 million to the Series B deal, said all possible liquidity strategies are still open.
“Right now they have enough money to act aggressively for two and a half years, without revenue,” Ugale said. “But counting on revenue, they might need a mezzanine round before an IPO or they could be acquired. A lot of big players could acquire them. They bring value that some of the big players don’t have yet.”
Whichever exit strategy is deployed, Ugale feels that Trendium future will become more secure if the company is able to snag a big-name customer. “If Bell South signs on, others will say Hey, Bell South did it,’ which is great certification and the rest will follow suit. They need to show they are signing on customers, which will lead to revenue,” Ugale said, adding that he expects the company to be announcing customers within 90 days.
“Our advantage is our being early to market with a product. As the market dried up, the capital markets have been less willing to finance service providers, so everyone started looking into the software industry but we are already there, with an 18-month lead and a service that goes beyond the pipes,” Swami said.