Cellular backhaul switching co Celtro raises $20m

The company raised capital even though it claims to have strong revenue.

Cellular backhaul switching start-up Celtro Ltd. has raised $20 million in its third financing round. Roh Capital of the US led the round, and was joined by the company's current investors, Genesis Partners, Cedar Fund, Israel Discount Capital Markets & Investments Ltd.'s Momentum Management, Kreos Capital, and ECI Telecom Ltd..

Celtro was founded in 2003 as a spin-off from ECI. It makes cellular backhaul switching solutions that improve service delivery and increase network efficiency for mobile operators. The company's technology can triple the traffic that a network can handle. Celtro chairman and CEO Ron Zor and COO and CTO Zohar Heiblum run the company. Zor is also a managing partner at Momentum Management.

Celtro raised the capital even though it says that it has strong revenue. Zor said the company posted $21 million revenue in 2007 and added, "We're close to becoming profitable".

Celtro's customers include leading cellular operators. Its competitors include the four telecommunications equipment market leaders Cisco Systems Inc. (Nasdaq: CSCO), Tellabs Inc. (Nasdaq: TLAB), Huawei Technologies Co. Ltd., and Alcatel Lucent SA (NYSE; Euronext: ALU), as well as Nortel Networks Inc. (NYSE; TSX: NT), and Nokia (NYSE; LSE; HEX: NOK). Zor said, "We unashamedly stand together with the industry giants."

"Globes": Has the economic downturn and uncertainty affected you?

Zor: "There's uncertainty in the market, and I personally think that we're facing the bursting of a mini-bubble in Israel. We don’t feel it at Celtro, because we operate in a strong market and we have a strong economic foundation, as cellular operators worldwide, including in the US, Europe, India, and Brazil, are showing robust growth. This robustness is seen, among other things, in the fact that they taking their transmission infrastructure seriously, and we're there with the right products."

So why raise capital, if your situation is so great?

"You raise money when you can. We need money for working capital; that was the main reason. In the Israeli economic reality, there is no financing for companies like ours."

Published by Globes [online], Israel business news - www.globes-online.com - on May 12, 2008

© Copyright of Globes Publisher Itonut (1983) Ltd. 2008

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