BigBand Networks Inc. wasn't looking for more funding to further its development track — rather, the funding found it.
The Redwood City, Calif.-based provider of Gigabit Ethernet television and video-on-demand content delivery and management systems recently managed to snag another $15 million from a group of capital investors, even though it was not actively seeking another round of funding. The group specializes in companies with maturing business plans.
BigBand will get the funding boost from Meritech Capital Partners. After four funding rounds, the company has gathered some $75 million from investors, including AOL Time Warner Ventures, Charles River Ventures, Evergreen Investments, Pilot House Ventures and Redpoint Ventures.
"The fact that we got people pursuing us for investment in this environment — which is the exception to the rule — is a validation of the fact that people see us as an exception, and our business plan continues to work as planned," said BigBand president and CEO Amir Bassan-Eskenazi. "The good news is we didn't need this investment – we had an opportunity to take it, and we took it, so we can continue and build the company."
Meritech, which focuses on investments with companies that have passed out of the start-up phase, was attracted to BigBand because of the broadband delivery market's potential.
"We are very pleased to align with BigBand Networks, and expect great things from the company in the markets for video and multimedia services over broadband networks," said Paul Madera, managing director of Meritech Capital Partners. "We have carefully tracked BigBand Networks' progress over the past two years, and have been impressed by its continuing revenue growth in this difficult economic environment."
BigBand will use the windfall to push along its Ethernet technology, including its switched-broadcast scheme for high-volume VOD systems. Switched broadcast would allow cable operators to fire off video content to edge servers only if customers request those titles, freeing up significant amounts of bandwidth.
"We expect to be positioned to take advantage of this, and mostly to pursue execution of our business plan and accelerate our growth and develop more applications and bring it to the benefit of our customers," Bassan-Eskenazi said. "When that is going to be, there are too many machinations for us to go out and guess.
Similarly, BigBand is still mulling its options when it comes to the final startup phase of an initial public offering. Going public has fallen out of favor in the recent harsh economic climate, so the start-up will weigh timing of such an offer carefully.
"We probably will be in a similar situation with the IPO — when there is a market to do that, we will do it," Bassan-Eskenazi said. "But until then, we are very much focused on execution, and execution is what really got us here and will get us to the next level."
Until now, the funding has assured that BigBand will have cash enough to reach breakeven, although the company is not releasing an estimate of when that point will occur. But the new funding "definitely improves our situation," Bassan-Eskenazi said.