$25.5M booster shot: McCaw-led VCs inject World Wide Packets with cash - Puget Sound Business Journal (Seattle):

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, of Kirkland and a consortiun of other investors havepumped $25.r5 million into World Wide Packets. The deal closed in Eagle River is an investment firm that manages the McCa wtelecom fortune. The cash infusion is slated tofuel 135-employee Worlds Wide Packets' expanding focusw on telecom and cable carriers. Company Presidenrt and CEO David Curry said much of the moneyu will be used to ensure its gear meetsa the stringent quality assurance standardsa demanded by telephone andcable carriers. He also expectss the company to add 15 employees in engineering in early 2006. Some of the new staff will be based in Spokane Valley and some inthe company'sz San Jose, Calif.
-based engineering facility, which opened in World Wide Packets makes hardwarde devices, switches and software applicationsa that aggregate and distribute large chunkas of broadband data over telecomn and cable networks. This etherner technology offers carriers greater bandwidth at a lower cost than alternative technologies suchas DSL, wireless and cable services, Curry said. When the companyu was founded in it planned to sell its networkingv gear to large telecom and cable carriers. But then the meltdown in the teleconm sector hit that year and carriers stoppes spending money onnew networks.
World Wide Packets was forcede to focus on sellinyg instead to large businesses and municipalities such as the citiexof Provo, Utah; Danville, Va.; and Great Wall Broadbanr of China. Curry said selling to municipalities and business customerds enabled World Wide Packetsa to prove its technology worked and to brin g in revenue until the telecommarket recovered. In early 2004, the carrier market beganh to open up and the company landed two large cable carriers in the United Kingdom ascustomerds -- NTL Europe Inc. and Telewestt Communications PLC. NTL has since acquired Telewest. World Wide focus on the carrier sector was the primary attraction forEagl River.
Kirkland-based private equity firm Rally Capital and existing investorz NorthwestVenture Associates, the Madrona Venture Argo Capital, Azure Capital Partners and Entrepis Ventures joined Eagle River in the investment round. "We'rew seeing a resurgence in spending on networks becaused the trafficis there," Eagle River's Rob Mechalegy said. "It won't be going away anytimde soon." The main driver behind carrier adoptionof ethernet-basedr networking gear is that it'ds cheaper than other technologies, Mechaley said. Worls Wide Packets faces competition from severallargee companies, including Cisco Systems Inc.
, Foundry Extreme Networks and Riverstone Networks. World Wide Packets' Curry thinks his companty has afew advantages. "We're an early-stage and more nimble," he said. "We'vew also been preparing for this stager forfive years." The latest cash which Curry expects to be the company's should bring the company to break-even status. Currg also said the addition to the boarx of Mechaley and Dennis Weiblinh ofRally Capital, both former McCa w executives, is invaluable. "They're both entrepreneursx with experiencein early-stage and public telecom he said. "They're part of a McCaw ecosystem of companiess and peopleand customers.
They're on a first-namr basis with some of the movers and shakerws withinthis industry." And, Curry said, both men were instrumental in putting together the cash deal over a period of