Overture Networks scores $15 million

In a time when venture capital is increasingly difficult to secure, startup Overture Networks scored a $15 million second round of funding from a lengthy list of investors. The company, founded in 2000, develops multi-service equipment to transition service providers to packet-based networks and is already in trials.

New investor Morgenthaler Ventures led the round, which included other new investors Armada Ventures and Intersouth Partners. Some existing investors such as Gray Ventures also participated in the round.

Associated with the new funding, Krish Prabhu, partner at Morgenthaler was named to Overture’s board, as was Harry Marshall from Armada.

“Even with the downturn, [providers] still have to continue to offer new services,” Prabhu said. “And this technology will work with what’s out there and slowly transition to next generation solutions.”

The Overture equipment sits at the network edge and gives providers the capability to offer new types of services while they still offer traditional ones, according to Prabhu.

Last week at the QuEST Forum in Dallas, SBC Communications chief technical officer, Ross Ireland pegged migration from circuit to packet and improvements at the edge of the network as the areas of likely spending for the provider, so Overture looks to be on the right path.

“We want to help providers like SBC solve those problems,” said Jeff Reedy, CEO of Overture. Overture has completed its first release and is in lab trials at four carriers, three of which are in the U.S.

The investment will primarily go to building sales and marketing capabilities and ramping up manufacturing, according to Reedy.

“You get a lot more scrutiny when someone invests in this space now,” Reedy said. “They want to make sure [the product] addresses a real market need.”

Prabhu echoed that sentiment.

“We won’t waste time on technologies we don’t believe in,” Prabhu said, adding that Overture’s existing trials are a very good yardstick for the future success of the company. Overture’s first round of funding was $3 million and with this second one, the company hopes to get to cash flow breakeven, Reedy said.