Mavenir Raises $155 Million, Aims for Integration Services
Telecom solution provider Mavenir has raised $155 million in a round that solidifies its strategy to compete with systems integrators in delivering multivendor hardware and software solutions to telcos worldwide.
The funding comes several weeks after Mavenir took a $95 million loan in the form of debt issuance on the public markets. Several news outlets, attributing Moody’s Investors Service, reported that the money was needed for R&D and to cope with higher capital costs and anticipated “softer top-line growth forecasts."
All of which tallies with Mavenir’s stated goal of widening the scope of its telecom solutions to include “turnkey” services, particularly ones related to Open RAN (O-RAN) deployments among telcos with existing investments in 4G and 5G networks – so-called brownfield opportunities.
Hardware Investment Continues
Mavenir, which made its name in telecom software (and continues to serve that market) has had its hand in many other efforts over the past two years. Its plan to be a comprehensive telecom supplier became clear when it introduced its own 5G O-RAN hardware units in 2020.
Other projects have included work with NVIDIA (Nasdaq: NVDA) on a 5G chip with artificial intelligence (AI) and a massive MIMO effort with Xilinx (which is now part of AMD).
But serving up soup-to-nuts O-RAN implementations in direct competition with systems integrators ups the ante for Mavenir and is no doubt behind its recent fundraising. Indeed, Mavenir CEO Pardeep Kohli told TelecomTV this week that the company is focused in part on ensuring it has the supply chain chops to meet customer demand for integrated Open RAN solutions.
Uphill Battle for O-RAN
Mavenir is investing heavily in the future of O-RAN, which continues to be a source of controversy. NEC, for instance, reportedly has indicated that telco customers have been moving only haltingly toward the open spec. It seems that even after initial trials, some telcos have been reticent about proceeding with commercial rollouts.
Other vendors have publicly spoken about the challenges of O-RAN. Nokia (NYSE: NOK), for instance, has acknowledged that progress in the market has been slow and that the future success of the technology is open to question, particularly when it comes to brownfield situations.
Still, Mavenir and its investors appear to be ready to stake a big claim on the brownfield opportunities for O-RAN – and perhaps for other integrated telco solutions. How well the bet succeeds will be a bellwether for other suppliers intent on following the O-RAN path to 5G.
The latest round of funding brings Mavenir’s total raised to $250 million. While Mavenir management declines to name the lead investor in the deal, the company affirms that Siris and Koch Strategic Platforms, a subsidiary of Koch Industries, continue to be majority and minority equity holders, respectively.
Koch Strategic Platforms took a $500 million equity stake in Mavenir in 2021.