NEW YORK (CNNfn) - Retreating from the carnage in e-commerce, venture capitalists are investing in infrastructure, making big bets on broadband.|
Network Photonics of Boulder, Colo., became the latest beneficiary of the rotation in the private-equity marketplace Monday, landing a $106.5 million second round of funding. The company builds third-generation fiber optic equipment designed for competitive metropolitan area service providers.
The big placement follows the announcement Friday of a $139.9 million third round of funding for New Edge Networks of Vancouver, Wash., a 15-month-old company established to provide wholesale broadband DSL services to small, midsize and semi-rural markets.
Also Monday, VantagePoint Venture Partners announced the closing of $1.6 billion for VantagePoint Venture Partners IV, the fourth fund raised since the firm's inception in June 1996. The new pool of cash almost triples VantagePoint's previous fund size of $560 million. The new fund intends to continue to concentrate its capital on early-stage networking and communications companies, specifically in the areas of fiber optics, wireless, semiconductor, IP networking, and Internet infrastructure technologies and services.
The announcements seem to put an exclamation point on a shift that analysts had noted previously. "It's still Internet related. It has just rotated where the money is spent," said Kirk Walden, who tracks the private-equity market for the accounting firm PricewaterhouseCoopers.
Venture capitalists in the second quarter pumped more dollars into Internet infrastructure and applications companies, PricewaterhouseCoopers noted in an August report, while funding declined for both business-to-business and business-to-consumer e-commerce companies.
Leading the round for Network Photonics was Sturm Group, with Spectrum Equity Investors, Mustang Ventures, New Enterprise Associates and U.S. Venture Partners also participating. Earlier in the year, NEA and USVP led the company's first round financing for $10 million, bringing Network Photonics' total funding to $116.5 million.
New Edge Networks raised $76.9 million Friday in private equity and received another $63 million in debt financing. GS Capital Partners III, L.P. and affiliates, an investment partnership of Goldman, Sachs & Co., led the private equity round. New Edge Networks has raised a total of $302.6 million.