After two years of dipping its toes into a cable-technology investment here and there, Boston-based Charles River Ventures has stepped up the level and scope of its involvement in the cable field.
The venture-capital firm recently stated its commitment to direct funds toward more fledgling cable industry companies on a regular basis, and to scope out developers of content and applications, as well as infrastructure-technology hopefuls.
The first deal on this agenda involves Broadbus Technologies Inc., a video-on-demand and streaming-media server company that received more than $12 million in funds Oct. 7 from Charles River and other venture-capital institutions, including one run by Comcast Corp.
Broadbus made its public debut last Wednesday (Oct. 30) when CEO Jeffrey Binder appeared at the Paul Kagan Associates VOD Summit.
Charles River — led by former Blockbuster Entertainment president Santo Politi — expects one or two more cable investments before the end of 2002, and more "before too long."
Which opportunities are under examination? "That's my trade secret," Politi said.
"Charles River came in three months before we did this financing," Binder said, calling the investor "a class venture firm in every respect, from the way they conduct their diligence process to how they gauge players. They are very sensitive to the needs of a company as they arise."
Over the last three decades, Charles River has invested about $2 billion in a variety of companies. In his two years at the helm, Politi's respect for the cable industry has increased. He now believes the industry is poised for the next generation of growth.
"The operators are in good shape with their upgraded plant to deliver [video-on-demand], interactive TV, HDTV and much more," Politi said. "What I'm out to do is see all the different opportunities and problems cable has, then come up with new investments that will solve those problems and fulfill the opportunities. If we can't find a company that fills a particular spot out there, we'll try to start one."
That outlook has been shaped by Politi's investment fortunes with BigBand Networks Inc. — the bandwidth-expansion vendor that lists Cox Communications Inc. and Time Warner Cable as clients — and Cedar Point Communications, a provider of voice-over-Internet-Protocol telephony switching.
Charles River also invested in River Delta Networks, another telephony infrastructure vendor, which Motorola Inc. bought last year for $300 million.
Charles River took at least 20 percent equity in each firm, and Politi serves on BigBand's board of directors.