Syndeo rakes in $75 million

If it’s true that only your friends will lend you money, Syndeo has some good buddies in the cable industry. The Class 5 voice-over-IP softswitch/call management server vendor has raised $75 million in third-round financing from a an investment group co-led by Comcast Interactive Capital and IUGO Ventures and backed by AOL Time Warner, Cox Communications, Rogers Communications and Shaw Communications.

Other equity investors include Critical Mass Ventures, Intel Capital, Invemed Fund, L.P., Meritech Capital Partners, Presidio Venture Partners, Redpoint Ventures, Scientific Atlanta, Sumitomo, Sun Microsystems, WK Technology Fund and YAS Broadband Ventures.

It brings Syndeo’s total financing to $98 million.

The cable support is natural, said Ted Griggs, Syndeo’s CEO because cable companies will be the first to deploy the products Syndeo builds. “The cable companies are going after the triple play--video, data and telephony as a bundled service,” he explained.

That triple bundle has been shown to jack up revenues and cut back churn.

“That’s a motivator to go into this business,” he said.

The MSOs’ motivation for investing in Syndeo is just as clear.

“We put together a technical advisory board so everyone who has invested gets to put their key decision-maker on the board and help define what our current priorities are,” said Griggs. This will help Syndeo prioritize its development cycles, he added, noting, “Even with all this money, we want to conserve our resources.”

Despite the seemingly incestuous relationship it now has with the cable industry, Syndeo is not abandoning more traditional telcos that would also look to use softswitches and call management.

“People ask about the ILECs. The ILECs right now have no competition,” he said.

That could change. “If the MSOs start to take some market share, maybe that will motivate them. We have started to see RFIs on the ILEC side on residential soft switches. It might happen,” he said.

If it follows the cable timeline, that might mean telco business next year because “we just started to see some activity this time last year on the MSO side,” he said.