Koch Industries Takes $500 Million Stake in Mavenir

Mavenir, a 5G technology firm, has sold $500 million worth of equity to Koch Strategic Platforms, an arm of Koch Industries. Siris Capital Group LLC continues to hold the majority stake in Mavenir.

The move signifies the increasingly important role Mavenir is playing in the development of 5G worldwide, particularly relative to the open radio access network (O-RAN) market. It also could signal the startup’s intent to move to the next level with a possible IPO.

Koch’s Ongoing Tech Investment

Koch Industries Inc., headquartered in Wichita, Kansas, is a privately held multinational conglomerate (and owner of Georgia Pacific, among many other companies). Koch invests heavily in technology firms at all stages of development and last year led a $54 million Series B investment in Alkira, the Futuriom 40 cloud networking firm. Koch also was the first customer to go public about using Alkira’s Cloud Services Exchange (CSX).

Mavenir, headquartered in Richardson, Texas, emerged in 2017 from a company called Xura after Xura acquired Mitel Mobility, a subsidiary of Canada’s Mitel Networks Corp. At the time, Siris Capital Group also took ownership of the new company with the Xura affiliates.

Mavenir now boasts roughly 4,200 employees worldwide and hundreds of millions in annual revenues. Customers include Rakuten Mobile, Telefonica, T-Mobile, and about 250 other operators in 120 countries.

Mavenir Is Active in Hardware and Chips

Mavenir began as a telecom software supplier competing with the likes of Metaswitch (now part of Microsoft - MSFT) and continues to serve that market, but it has also extended its efforts beyond software. It began making its own radio units last year and also has been designing a Massive multiple-input multiple-output (MIMO) radio unit with Xilnx (XLNX).

Mavenir also has contributed to the development of an NVIDIA AI-on-5G component platform. That project, which also includes co-members of Mavenir in the O-RAN Alliance, aims to bring artificial intelligence (AI) to accelerated 5G applications in manufacturing, guided vehicles, drones, and other markets. Mavenir is selling an AI-on-5G Hyper Converged Edge solution derived from the project to communications service providers.

Mavenir Backed Away from IPO Last Year

Mavenir has continued to lead efforts toward adoption of O-RAN as 5G rolls out. Indeed, as news of the Koch stake broke this week, Mavenir representatives had just finished advocating for the vendor-neutral O-RAN technology at a virtual hearing before Congressional officials in Washington, D.C.

“[T]he US government should provide … financial incentives, such as loan guarantees, tax incentives, and funded demonstration networks to propel our mobile carriers to pursue open RAN deployments," said John Baker, SVP of business development at Mavenir, during the hearing, as reported by Light Reading.

Whether Mavenir’s exposure and financial momentum will translate to a next step for the company is a question. Late in 2020, Mavenir filed an S-1 with the U.S. Securities and Exchange Commission (SEC) to go public, but withdrew the registration in October 2020, citing market volatility. Whether that postponement is now being reconsidered is unknown. But as Mavenir continues to build momentum and the markets stabilize a bit, the plan could re-emerge.