Who says broadband and telecom are dead? Apparently the sectors still have a little life in them, or at least Ampersand Ventures is hoping they do. The San Diego-based VC, along with Edgewater Funds just invested $10 million into Viadux, a hook-up solution for the telecom and cable industry. This is Viadux’s fourth round, however the Atlanta-based company has changed its name from RC Networks Inc., relaunched itself as Viadux, and is calling this its Series A preferred round.
Under its old name, Viadux collected more than $30 million from VCs. “It was building up revenue and a customer base,” says Vicki Marion, the company’s new president and CEO. “Then the CLECs [competitive local exchange carriers] crumbled and we lost our customers. Now we’re starting over; our shareholders thought it was the best idea.”
Viadux’s broadband gateways claim to bridge the gap in delivering high-speed data, video and voice services to small and medium companies. According to Andrew Parker, a general partner with Ampersand Ventures, more than 90% of small and medium sized companies lack broadband, yet this customer base reportedly spends $62 billion a year on telecom services.
Parker went to say that while Ampersand funded the company once again to give it the opportunity to capitalize on the new market, there comes a point where his firm will look to others to validate what he thinks is a good idea.
“They need to show progress in the way of customer wins,” says Parker. “We’ve given them enough to last a while, but is not unlikely that they will have to do another round. At that point we will look to bring in other investors. We can’t carry this company forever.”
Parker went on to say that he realized that gaining customers is no easy feat as selling telecom services right now is extremely hard because the CLECs and ILECs businesses are in turmoil.
The round is expected to carry the company into 2003 and its next round would likely be an expansion round.
Viadux already has 650 systems worldwide and is expected to use the new funding to finance sales and marketing as well as further development of the company’s product.
In addition to the new financing, Viadux has named Jack McGuigan as vice president of worldwide sales; and Mike Harman as vice president of business development.
Contact Danielle Fugazy at Danielle.Fugazy@tfn.com