Allot Communications Raises $7 Mln in Private Placement

Israeli funds invested in the company: Gemini, Waldan, Genesis and Tamar.

Israeli start-up Allot Communications of Hod Hasharon has raised $7 million in a third round of fundraising, which so far includes the Gemini, Walden, Genesis (Oppenheimer) and Tamar funds. Together, they invested $4 million. The balance will come from foreign funds, whose names have not yet been released for publication. To date, $13 million has been invested in the company.

This is the company’s second round of fundraising from venture capital funds. In the previous round, in February 1998, Gemini, Walden and Genesis invested $4.3 million. Prior to that, on its establishment, the company raised $1.5 million from private investors.

Allot developed a combined hardware and software product that functions as a sort of communications traffic police for information networks based on IP. The company’s products manage communications networks in order to extract optimal use from them, including allocation of bandwidth and monitoring, aimed at more efficient exploitation of resources, without the expenses involved in increasing the infrastructure. The target market of the company’s products are large organizations, Internet service providers and satellite and cable communications markets.

Company founder and CEO Yigal Jacoby said that following the exercise, the company would expand its activities in the US, and continue to develop new products. He said the company would shortly present a complementary product that enables an organization to integrate information into the resources allocation policy. Allot currently employs forty-five workers.

The company was founded by Michael Shurman and Jacoby, who founded Armon Networking, sold at the beginning of 1996 to Bay Networks for $36 million in cash. After the sale, Armon, which is engaged in communications networks management systems, became the core of Bay Networks Israel, which now has one hundred employees.

In January 1999, Allot won the title of the year’s hottest product by the Data Communications’ magazine, and at the end of last year, the magazine called it "one of the most promising twenty-five companies of 1999".

Published by Israel's Business Arena April 12, 1999

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