Calix Raises $100 Million in Funding
Carl Russo, the legendary entrepreneur who sold a start-up to Cisco for $7 billion several years ago, can be proud of another milestone. On Aug. 31, Calix, a networking equipment company where Russo is CEO, announced it completed a $100 million round of funding lead by Foundation Capital. Russo tells BusinessWeek.com he poured in some of his own money as well.
What’s the money for? It could be used for future acquisitions, to rev up production, and to enter new markets. “We thought we had an opportunity to accelerate our growth rate,” Russo tells BusinessWeek.com. In 2008, privately-held Calix’s sales of gear used in broadband networks rose 29%, to more than $250 million, according to the company. And while he wouldn’t release this year’s results, Russo says Calix has gained market share in 2009.
In the coming months, Calix hopes to benefit from Obama Administration’s broadband stimulus initiative, a program designed to bring broadband into rural areas that Calix’s carrier customers service. About 40% of U.S. rural service providers use Calix’s equipment to deliver video and other broadband services to the home, according to the company.
The company may also consider growing its global presence beyond North and Latin America. “We have global aspirations,” Russo says. Acquisitions may be in the works as well. So far, Calix has only acquired one company more than three years ago.
While it’s been speculated that Calix may try to go public, that may not be in the cards for now. “It was never an issue raising funds [privately],” Russo says. “I am sure at some point in time [an Initial Public Offering] will occur.”
Would Russo consider selling Calix? “We shouldn’t build a business to be acquired, and we shouldn’t build a business not to be acquired,” Russo says. “If somebody starts writing us a check with a lot of zeros in it…”