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May 24, 2016
Company Receives Funding From Corporate Partner, Initial Investors, New Investors and Employees Apr 27, 1998, 01:00 ET from Avici Systems, Inc. CHELMSFORD, Mass., April 27 /PRNewswire/ -- Avici Systems, Inc., the leader in multi-terabit switch/routing, today announced that it has successfully closed an unprecedented $55.3 million second round. Funding sources included a corporate partner (Nortel), the company's initial investors, new investors and the company's employees. "As far as we know, no other networking company in history has received such overwhelming validation of its market potential," said Surya Panditi, CEO of Avici. "We are building a carrier-class, high-end system that requires significant development, as well as 99.9999 percent availability. This effort takes a significant amount of investment, and we now have the resources to make that happen. " The second round, which closed on March 31, 1998, includes the recently announced equity stake from its corporate investor Nortel. As a result of that investment, Nortel will own approximately 20 percent of Avici Systems, and Nortel has placed Mike Unger, president of Nortel's Optical Networks Division, as a voting member of Avici's Board of Directors and T.J. Fitzpatrick, vice president and general manager of Nortel's Carrier Data Networks Division, as a Board observer. "I look forward to working with the dynamic and innovative team at Avici to develop and launch one of the most strategic products required in future, leading-edge optical networks," said Mike Unger, president, Optical Networks, Nortel. The company received an additional $8.35 million from its initial investors, including Accel Partners, Brentwood Associates, Comdisco Ventures, Oak Investment Partners and Polaris Venture Partners. Avici's new investors include Amerindo Investment Advisors and Tudor Investments, as well as two private funds: Anschutz Family Investment Company and Bayview. "Amerindo is very excited about its investment in Avici. The convergence of the two fastest growing technologies in communications: the Internet Protocol (IP) and Dense Wave Division Multiplexing (DWDM), has created the need for Terabit class routers," said Marc Weiss, analyst at Amerindo Investment Advisors. "We feel that the combination of Avici's world-class management and R&D teams, top tier board members, and Nortel relationship puts Avici in an excellent position to exploit the potentially explosive Terabit router market. " Avici Systems was founded in 1996 and is developing breakthrough Terabit Switch/Router (TSR(TM)) technology to meet the demands of carriers and Internet Service Providers (ISPs) worldwide to deliver value-added, high- performance services. By soliciting product requirements from key carriers and ISPs, Avici's TSR integrates new and emerging technologies that will address mission critical applications, such as virtual private networking (VPN) and electronic commerce, as well as multi-protocol integration to protect carriers' investments in current technologies and to form the cornerstone of their next generation optical network for the unpredictable future carriers face. "The tremendous growth in Internet traffic is causing an enormous latency and congestion problem on the public network today. As more and more mission critical applications move to the Internet, carriers must invest in network equipment that can provide speed and reliability," said Rick Ganong, vice president, Tudor Investments. Avici's impressive design team understands the robust requirements of building a carrier-class product and has uniquely addressed the problems of Internet performance -- now and into the next century. " Avici's employees invested $500,000 during the second round, illustrating their commitment to the company's vision, technology and product. "The investment on the part of our employees is particularly important to us," said Panditi. "We have world-class engineers building a world-class product. Their investment in the company confirms their enthusiasm for, and commitment to, our success in the marketplace. " Avici's second round brings its total investment capital to $72 million. Avici received its first round of funding in July of 1997, following an initial seed round. Avici Systems, Inc., headquartered in Chelmsford, Massachusetts, is the premier developer of Multi-Terabit Switch/Router technology aimed at providing the next generation of scalable, carrier-class IP switches for Internet Service Providers (ISPs) worldwide. Visit Avici's World Wide Web site at http://www.avici.com. NOTE: TSR is a trademark of Avici Systems, Inc. SOURCE Avici Systems, Inc.