Broadband Access Accesses $15M

As more cable television subscribers begin to access the Internet through a cable modem, operators search for ways to more efficiently process video, data and voice services.

Broadband Access Systems develops delivery equipment for cable system head ends. Earlier this month, the Orlando-based company received $15 million in its second institutional round of private equity financing.

First-time investor Norwest Venture Partners invested more than $7 million in the round. Existing investors Matrix Partners, North Bridge Venture Partners and The Still River Fund each returned at pro rata. Broadband Access, which was incorporated in February 1998, has received more than $23 million in venture financing to date.

“Our technology allows operators to combine six pieces of equipment they currently use at the head end into a single box,” said Chief Operating Officer Abbot Gillman. “No product can connect as many users as we can.” Broadband Access has completed its alpha product and expects to begin shipping equipment to operators later this year, Gillman said. Gillman cited communication companies Nortel, 3Com and Cisco Systems as Broadband Access’s primary competitors.

“The market is ripe for next-generation cable equipment,” said Norwest General Partner Ernie Parizeau. “There is now a greater opportunity for a bunch of engineers to beat the big guys to the punch.”

Parizeau noted that a barrier to entry for many start-ups in this space is the inability to integrate digital services with radio and television frequencies associated with traditional cable programming. Broadband Access technology is designed to integrate these functions as they evolve into a digital platform.

“Traffic on the Internet will significantly change with video and telephony applications,” Gillman said. “You need a product capable of handling several types of services and platforms.”

Proceeds from the investment will be used for working capital and product development. Gillman would not comment on whether Broadband Access would engage in additional rounds of private equity financing.