There's Money Out There After All - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
News

There's Money Out There After All

Two little-known companies managed to close sizable private equity rounds recently, amid a sea of disappointing earnings and layoffs.

The capital markets aren't being kind to technology companies of late, but there are still some private equity funds out there. For proof, look no further than two little-known firms that last week closed impressive financing rounds: Storm Telecommunications and Blue Pumpkin Software Inc., which raised $35 million and $19.2 million, respectively.

Silicon Valley-based Blue Pumpkin, which makes workforce optimization software that helps companies improve customer interaction by ensuring that the right employees are in the right jobs, has now raised nearly $60 million. CEO Doron Aspitz says the most recent investors--CE Unterberg Towbin, J&W Seligman & Co., Liberty View Equity Partners, and Needham Capital Partners--were attracted to the return on investment that Blue Pumpkin's customers are realizing by using its software. Aspitz says SGI, for instance, reported a 3,000% return in six months and has achieved a 49% increase in productivity. "The investors believe this will be the next wave of productivity improvement on the enterprise level," he says.

While Blue Pumpkin's focus on efficiency is a good fit in a tight economy, Storm's fundraising is notable in a depressed telecom sector. Since its founding in 1998, the British supplier of optical networking services has raised $400 million, much of which came during a venture-backed management buyout last year. CFO Josh Joshi says most of the recent round of financing will be used to help fund the company's pending rollout of pan-European gigabit Ethernet services. Storm is also aggressively pushing its Lighting service, which provides U.S. customers with network access across a dozen major European cities.

Independent telecom analyst Jeff Kagan says raising so much money in the current telecom environment is a significant accomplishment that implies a strong combination of technology and connections. "There must be some fire where there's all that smoke," says Kagan. He says he wouldn't be surprised if Storm--about which he knows little--starts developing a higher profile, especially given the current dearth of "fun and interesting companies" in the telecom industry. But Kagan also cautions that with big players like AT&T and WorldCom charging into Europe to peddle networks, Storm has its work cut out for it.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
The State of Cloud Computing - Fall 2020
The State of Cloud Computing - Fall 2020
Download this report to compare how cloud usage and spending patterns have changed in 2020, and how respondents think they'll evolve over the next two years.
News
Top 10 Data and Analytics Trends for 2021
Jessica Davis, Senior Editor, Enterprise Apps,  11/13/2020
Commentary
Where Cloud Spending Might Grow in 2021 and Post-Pandemic
Joao-Pierre S. Ruth, Senior Writer,  11/19/2020
Slideshows
The Ever-Expanding List of C-Level Technology Positions
Cynthia Harvey, Freelance Journalist, InformationWeek,  11/10/2020
Register for InformationWeek Newsletters
Video
Current Issue
Why Chatbots Are So Popular Right Now
In this IT Trend Report, you will learn more about why chatbots are gaining traction within businesses, particularly while a pandemic is impacting the world.
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll