Israeli venture capital fund JVP has led to a huge round of funding totaling $50 million in American-Israeli technology company CyOptics.
CyOptics decided to refuse two investment offers from US private equity funds and go with JVP, which has invested in the company since it was founded in 1999.
The company develops telecommunications components and chips based on optical technology. Its technology allows providers and carriers to transmit different kinds of content in volumes of up to 100 gbps on cable networks. The market in which it operates is flourishing because of the demand for bandwidth, which has doubled every eighteen months in the last decade.
CyOptics has attracted huge amounts of capital in terms of Israeli venture capital. Since its inception, it has raised $ 204 million. In 2010, the company had record revenue of more than = $ 100 million, and it has a promising backlog of orders for 2011.
In addition, it has merged with or acquired three companies since it was founded, which helped it establish its place in a market where there are big players.
Today, CyOptics offers products it develops, manufactures, and packages to = 100 customers worldwide, among them telecommunications companies, equipment vendors and companies in the security field.
Some of the capital raised will be used by company to buy holdings of existing investors, and previous investors, such as Sprout Group and Birchmere Ventures, joined the current round. In late stage deals in a company in the US, venture capital funds that cannot continue to fund the company's operations until the desired exit usually sell their holdings at modest multiples to new investors, who can finance and leverage the company. The company did not elaborate on which of the previous investors were bought out and for how much, but it is known that some of the institutional investors in JVP funds also participated in the round independently.
Published by Globes [online], Israel business news - www.globes-online.com - on January 26, 2011
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