Telecom Infrastructure Is Hot Again

For years, communications networking has been pretty much a one-way investment bet. That is, money went into startups, but very little came back out.

In recent weeks though, that’s been changing. At least three companies in the sector have gone public in the past three weeks, and others are waiting in the wings.

Overall, market reception has been warm. Shares in wireless network provider Meru Networks closed up 28% in first-day trading on March 31, with shares trading in a narrow range since.  Sunnyvale, Calif.-based Meru  which sells wireless LAN equipment, raised $66 million in a Nasdaq offering. Principle shareholders include Clearstone Venture Partners (21% stake), Vision Opportunity Master Fund (19%), NeoCarta Ventures (18%) Bluestream Ventures (16%) and D.E. Shaw (16%). Meru has raised $171 million in venture funding since 2002.

Telecom equipment maker Calix Networks also posted double-digit gains in its debut a week earlier. Calix, a Petaluma, Calif.-based provider of communications access systems and software, priced its 6.3 million shares offering at $13 per share, the high end of its proposed range. The stock closed up 16% in first-day trading and is currently around $14. Previously, Calix had raised around $220 million in VC funding from Foundation Capital, TeleSoft Partners, Azure Capital Partners, Meritech Capital Partners, Redpoint Ventures, Contrarian Capital Management, Credit Suisse, Kinetic Ventures, Menlo Ventures and Integral Capital Partners.

Broadband chipmaker MaxLinear had a similarly warm welcome for its debut the same day. The Carlsbad, Calif.-based broadband chipmaker raised $90 million in its IPO, which priced slightly above the anticipated range and gained another 18% in first-day trading.  The stock is currently around $17. Previously, Maxlinear raised around $35 million in VC funding, from backers including U.S. Venture Partners (21.62% pre-IPO stake), Battery Ventures (13.75%), Mission Ventures (13.03%) and UMC Capital (7.09%).

Others planning offerings include Santa Clara-based Beceem Communications, which filed last week for a $100 million public offering. The company raised $20 million about a year ago to further develop a line of chipsets for 4G applications, with backing from Global Catalyst Partners, Khosla Ventures, KTB Ventures, Walden International and strategic investors Motorola, Intel Capital, NEC, Mitsui and Samsung. The 7-year-old company, which has raised $130 million to date, says it is also working on a chip that integrates the two predominant 4G technologies – LTE and WiMAX.

Another Silicon Valley company, Force10  Networks. filed about a month earlier The ethernet products and services provide is planning to raise up to $144 million through an offering on the New York Stock Exchange. Previously, the San Jose-based company raised a staggering $418 million in venture funding. In 2009, it acquired rival Turin Networks, which had previously raised $254 million and, like Force10, was founded in 1999. The largest current venture stakeholders in Force10 are Advanced Equities Capital Partners, with a 28% stake, and New Enterprise Associates, which owns 9.8%.