New funding fuels more Actelis growth

Actelis Networks, one of the leading players in the growing Ethernet-over-copper equipment market, today signaled the next step in its growth, announcing a new financing round intended to fuel the company’s expansion into larger network operators.

The company raised an additional $22 Million in private capital in a round led by Adams Street Partners and including all of Actelis’ existing investors including ATA Ventures, Global Catalyst Partners, Dupont Capital The Carlyle Group, Innovacom Venture Capital, Vertex, Walden International New Enterprise Associates, as well as Independent Venture Fund.

California-based Actelis has been successful globally in penetrating Tier 2 service providers with its bonded copper Ethernet solutions, including Alltel, Broadview, Century, Colt, Frontier and Windstream, as well as Qwest. The company uses copper bonding, industry standards such as G.SHDSL and its own patented techniques that include the industry’s first Ethernet in the First Mile repeaters to enable service providers to offer Ethernet to buildings which aren’t connected by fiber. Thus far, it has more than 4500 deployments in 25 countries, claiming an 80% market share in the EFM market.

The new funding will help fuel Actelis’ push into the top tier of service providers globally, and its continued research and development in technologies such as VDSL 2, said Mehmet Balos, chief marketing officer and president of the Americas for Actelis.

“We have revenue-generating accounts,” he said. “What this funding will do is allow us to boost our commercial operations along with our R&D and technology. We are driving the standards, contributing to the standards, adding new patents to our technology, first in G.SHDSL and now in VDSL 2. Those efforts need additional funding, to enable us to get to commercialization.”

In addition, Balos said, as Actelis increasingly deals with major PTTs globally, the company is “investing in customer support and services around the globe.” Actelis has posted nine consecutive quarters of growth, he said, and expects that to continue.

With the explosion of interest in Metro Ethernet, copper Ethernet solutions are gaining traction to enable service providers to offer end-to-end Ethernet solutions, given the high percentage of office buildings that aren’t connected by fiber optics. Demand for Metro Ethernet gear is only increasing as a growing percentage of Internet traffic includes video and multi-media content, increasing the need for bandwidth.

Actelis gear enables service providers to deliver up to 5.7 Megabits per second per copper pair or up to 45 Megabits per second over eight bonded pairs, at distances up to 25 miles from a Central Office using its patented repeater technology.

EFM is also increasingly in demand to provide backhaul of wireless services, Balos said.

“Wireless carriers are converging to 3G and that is all Ethernet-based,” he said. “When we talk to wireless carriers, which are own by wireline parents, we hear that between 60% to 70% of base station sites do not have fiber access. They are using multiple T-1s today, which is costly and doesn’t scale up.”

“2007 will continue to be a breakout year for the leaders of the Ethernet Access market,” said Michael Howard, co-founder and principal analyst at Infonetics Research, in a prepared statement. “Based upon our knowledge of contract activity last year, we expect that Actelis Networks will continue to be one of the worldwide market share leaders in this category again this year.”