AccessLan Nets $20M Preferred Offering

In a private equity round that will take the company to an initial public offering in 2000, AccessLan Communications Inc. of San Jose, Calif., raised $20 million last month from a syndicate of venture investors.

Highland Capital Partners of Boston led the preferred stock offering. Additional venture investors included Tudor Private Equity Fund, The Ignite Group, NIF Ventures, Accel Partners, Sequoia Capital and Berkeley International Capital. Intel Corp. also participated as a strategic investor, said Kumar Shah, vice president at AccessLan.

AccessLan has developed a suite of products that serve the digital subscriber line (DSL) market. The company intends to use proceeds from the offering to meet several objectives, Shah said. Plans call for the company to double its sales team in order to meet the market interest for DSL services, including shared tenant services and other emerging markets for DSL.

Secondly, the company intends to expand its geographic reach beyond North America. Shah said AccessLan plans to enter Europe this quarter and follow that with a simultaneous entry into Asia and Latin America by year end.

The third portion of the capital will permit the company to make additional engineering hires to accelerate the development of the next generation of its DSL products.

AccessLan’s product currently provides local loop service that Shah said is attuned to the packet structure of data delivery. The company’s initial product can expand the capacity of existing data lines to handle as much as 27 times the current maximum load.

The current focus of most DSL service providers is the delivery of Internet service over lines, but Shah anticipates the next step in the process will be lines that can carry voice and data simultaneously.

“With the next generation, we will deliver 16, and as many as 24, channels on a single wire and also offer broadband Internet access over the same wire,” Shah said.

He added that the company is in the midst of the first deployment phase of this product although the project needs more work before it will be complete.