Yipes taps debt market

Yipes Enterprise Services completed its fourth round of funding, taking in $17.5 million in credit and equity, the company announced this week, tapping the debt market for the first time in its seven-year history.

The round included a $9 million line of credit from SVB Silicon Valley Bank and $8.5 million in series-D equity from existing investors Crosslink Capital, Norwest Venture Partners, JPMorgan Partners and Sprout Group, an affiliate of Credit Suisse.

With the new round, Yipes has raised a total of $106 million in equity funding since it emerged from bankruptcy in July 2002.

The Ethernet service provider will use the new funds to expand into new markets--in Europe, Latin America and Asia, where the company already serves Hong Kong and Tokyo--and develop new products. Those new products will likely be tailored to specific industry verticals, the company said, and include managed storage and business continuity offerings.

“Various quality-of-service and class-of-service-type offerings,” Keao Caindec, chief marketing officer, said. In April, the company announced improved service level agreements for its Ethernet services.

After a $63.5 million round in 2003, Yipes claimed to be “fully funded” to reach positive cash flow in early 2004. Then, after a $24 million round in April 2005, the company said it had more than enough funds to reach positive cash flow in 2006, a goal Caindec still expects Yipes to achieve. In February, the company announced having reached positive earnings before interest, taxes, depreciation and amortization in 2005 with more than 700 customers.

“We’re hiring,” Caindec said.