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VC watch: Santera Systems gets $110 million

Santera Systems raises more than $110 million...Princeton Optronics picks up $25 million...Flag Telecom Holdings secures $300 million.

Tech Industry
Companies have lived through the boom, and some have survived the bust, but which players will be the trendsetters of the future? The following list is the latest news from start-ups here and abroad that have received venture funding. This page is updated daily. Keep checking back for the latest.

Has your company just completed a round of financing or received other venture capital support? E-mail the editors at News.com.

Monday's deals

• Santera Systems, a maker of switches for communications networks, said it raised more than $110 million in third-round financing. Believed to be one of the largest this year for a private company, the round of funding was led by Redpoint Ventures. Santera has now raised about $200 million since its formation. Massive rounds of financing are common in the communications industry, which requires immense capital to build complex fiber-optic and Internet technologies. But VC funding had dried up over the past year as the Internet and communications sectors tanked. Santera's large round of funding is something of a departure from that trend.

• Optical component maker Princeton Optronics announced it has raised $25 million for its second round of funding led by Investor Growth Capital and St. Paul Venture Capital. Technology Venture Partners also pitched in for the second round along with Intel Capital and Novak Biddle, which also made up the $5 million first round. Princeton Optronics began making radio microwave equipment and doing government sponsored research in 1993 under the name of Princeton Electronic Systems and posted revenue of $4.2 million in 2000. The company changed its name to Princeton Optronics last year and began to focus on developing tunable lasers for telecom equipment. Carriers use lasers to transmit information in light form down glass wires. Tunable lasers can give carriers more ways to send that data as opposed to other lasers than can only work at a fixed frequency or color. The company aims to target equipment makers that send data over long-haul networks, or networks that run across the country between cities, and expects to start shipping its laser product in the first quarter of 2002.

• Flag Telecom Holdings, which is building a global, undersea communications network, said its subsidiary got $300 million in funding for construction of its Asian network. The new syndicated credit facility will release some of the funds Flag Telecom had previously committed to the project, giving it greater cash resources to fund other projects and improve its liquidity. Flag Telecom initially funded the Flag North Asian Loop network using its own cash and proceeds from pre-selling capacity to Level 3 Communications. Construction of the Flag North Asian Loop network has already begun. The eastern leg of the network, linking Hong Kong to Japan, was developed by Level 3. City-to-city services between Hong Kong and Tokyo started this month, and the Taiwan spur on this leg is progressing to schedule. The Western leg is being developed by Flag Telecom and will connect Hong Kong, Korea and Japan.

• Embedded Linux systems company Lineo announced the closing of a strategic investment round of $20 million, bringing the total investment in Lineo to $57 million. Investors in the newest round include Sun Microsystems, Hitachi, Canopy Group and Egan Managed Capital. Lineo software and hardware help companies with large supply chains use the Internet to bring down costs and decrease the time it takes to build products. Salt Lake City-based Lineo will use the newest round of funding to continue to develop embedded tools and support services.

Friday's deals

• Symphire Canada has received a $1 million first round of funding from angel investors. Newmarket, Ontario-based Symphire develops software to help identify potential employee candidates, and sponsors job fairs.

• Freeborders received a $9 million third round of funding. Investors in the latest round included TAL Apparel, ICG Asia, Internet Capital Group, Grupo Mina and Elek Moreno Valle and Associates. San Francisco-based Freeborders has raised a total of $42 million. The company develops software designed to allow manufacturers to collaborate with their distributors and retailers. The company's customers include Liz Claiborne, Nike and Lands' End.

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