Telecom equipment maker Caspian Networks announced Wednesday that it has raised $120 million in its fourth round of funding, bringing the company's total financing to $262 million.
"The funding they've announced will bring them to the point where they can either leave the runway or not," said analyst Steve Kamman of CIBC World Markets, who believes the investment will enable Caspian to bring its product to market, where it will compete against networking gear from Cisco Systems and Juniper Networks.
The company's main product, the Apeiro IP Superswitch, is basically a router that carries data over long-haul networks that run between cites. The Apeiro has been in trials with multiple carriers for more than a year, and Caspian aims to ship products this year.
Kamman said the San Jose, Calif.-based company will target data carriers such as Sprint, AT&T, UUNet, Cable & Wireless and Genuity as potential customers.
Caspian has attracted a list of backers since its incorporation in 1999. Current investors US Venture Partners, New Enterprise Associates and Merrill Lynch led the latest round of funding along with new investors Morgenthaler and Oak Investment Partners.
The company is not releasing details about its product, but company spokesperson Dallas Kachan said Caspian's main objective is to make gear that moves data more efficiently and cost-effectively.
CIBC's Kamman believes that a start-up such as Caspian has a decent shot at gaining a foothold in the depressed long-haul router market, where performance matters more than brand name, even though incumbents such as Cisco and Juniper will make any gains difficult to attain.
"There is too small a number of customers making decisions on very distinct needs to really call this market," said Kamman. "At least there is a market, and that's not a bad thing these days."