MetaSwitch gets cash infusion

Venture funding will let softswitch maker MetaSwitch expand globally as an independent company

Data Connection Ltd., the parent company of softswitch maker MetaSwitch, is getting its first large infusion of cash from private equity firm Francisco Partners, and its partner firm, Sequoia Capital, to expand its successful North American operation into the global stage.

The investment, the amount of which is undisclosed, gives Francisco Partners a substantial stake in DCL, which heretofore was internally financed and employee-owned. While outside funding is a departure for DCL and MetaSwitch, it will enable the company to remain independent as it continues to grow, said MetaSwitch CEO John Lazar.

“We have always liked the fact that we have been independent, and this enables us to continue to do that,” Lazar said. “We don’t have to get swallowed up and spat out somewhere else.”

One of the reasons DCL and MetaSwitch chose Francisco and Sequoia as investors is their support of the current company management, which stays in place, and a corporate culture which has managed only 3% attrition, Lazar said. In addition, Lazar cited the investors’ long-term view of success.

One immediate impact of the addition funding will be expansion of the MetaSwitch success in North America to other markets. MetaSwitch moved into the Central American/Latin American market 18 months ago and has made small steps into the Asia/Pacific Rim area but will be moving more aggressively, Lazar said. In addition to opening up a support office in Australia, MetaSwitch will also be expanding European operations, which today are limited to the U.K.

The MetaSwitch product portfolio, which includes its softswitch, media gateway, a service delivery platform and applications software, is already substantially broad, Lazar said.

“This is all about taking the opportunity we have created in North American and, in a sustained and planned and organized way, building on that opportunity,” Lazar said.