Caspian Networks Raises $55M
It is eye-catching to see Caspian Networks attract US$55-million in private equity - bringing its total fundraising total to $317-million. Clearly, investors see an opportunity for Caspian in the router market, which is dominated by Cisco and Juniper. Of course, there could be other angles to the deal given routers play such a crucial role in IP networks, and how Cisco and Juniper are winning key parts of next-generation network contracts - i.e. BT's $19-billion 21CN deal. To remain competitive and vibrant, major telecom equipment makers may need world-class router technology in their IP portfolios. Nortel is a prime example given how its partnership in Avici Systems has been less than successful. Nortel also appears to be having some troubles getting its Neptune edge router into the market - a key reason why it was nowhere near competitive in the BT supplier selection process. Perhaps Caspian's investors believe there is a big M&A deal to be done if the company can stick around until someone comes courting. Aside from Nortel, potential suitors may include Alcatel, Siemens, or even Cisco and Juniper. Cisco bought high-end router maker Procket Networks last year for $89-million for its 130 engineers. Maybe Chinese suppliers such as Huawei and ZTE would step up to the plate given they appear to have strong financial support to do deals.
