Ceon Corp., a developer of Web-based customer-service, activation and electronic-commerce software for broadband businesses, has secured $30 million in private equity financing from several investors, including cable-equipment maker Antec Corp.
Ceon plans to use the proceeds of the investment to expand its sales and marketing efforts and for working capital, including acquisitions.
Besides Antec, other investors include BEA Systems Inc., Portal Software Inc. and THK. They join earlier investors Sutter Hill Ventures, Technology Crossover Ventures, Accel Partners and Berkeley International Capital Corp.
This was the third round of financing for Ceon. Earlier rounds raised $9 million and $25 million, respectively.
Ceon got its start about 15 years ago as FirstTel Systems, a professional-services firm and developer of high-end automated service-delivery systems for telecommunications-service providers.
However, about 16 months ago, the company was restarted by a group of venture-capital firms, which changed its focus to concentrate on cable-billing and e-commerce software. FirstTel changed its named to Ceon in September.
The most recent round of funding should carry Ceon through to its initial public offering, which executive vice president of corporate development Doug Schrier said could happen in the second quarter of next year.
Ceon's software provides order-entry and workflow-management features, but also enables cable operators and other providers of bundled voice, video and data to allow customers to order and configure services via the Internet.
Schrier said that with the Ceon software, a customer could log onto the Web and order additional cable channels, a new phone line and additional high-speed-data services on a monthly or even weekly basis.
For example, he added, a grandparent could order additional cable channels, a new phone line and a data service for their visiting grandchildren for the week. Once that week is up, the customer could revert back to their previous level of service.
"Moving forward, customers will want to get all of their telecommunications services from one provider," Schrier said. "Our software is what manages that whole process."
Ceon is targeting cable operators and multiple-service providers in North America and Europe. Although the company has no deals yet, it expects to begin trials and sign up customers soon.
Schrier added that as cable operators begin to offer the bundle, the need to manage how they provide services becomes even more crucial.
"In a call center, it costs [the cable operator] $25 to $57 just to pick up the telephone to take an order," Schrier said. "What our software enables you to do is look at much more dynamic business models in building a multiple-service offering in the marketplace and making it profitable."
He added, "If you look at providing one service, you need a take rate of 30 [percent] to 40 percent for it to be a cash-flow-positive transaction. When you start to offer multiple services through the same pipe, that take rate can drop down to 5 [percent] to 10 percent to have that be a profitable transaction."
Although Ceon would not release revenue figures, Schrier said the market for bundled services is expected to reach as much as $10 billion. "The revenue projections are enormous when you get traction in that marketplace," he added.