Mysticom today announced it has raised $28 million in funding from several significant strategic and financial investors worldwide.
New investors include Lehman Brothers (NYSE: LEH), ABN AMRO Capital (NYSE:ABN), the investment arm of ABN AMRO, Royal Philips Electronics of the Netherlands (NYSE: PHG), whose semiconductors division is already a strategic partner of Mysticom, Israeli-based venture fund Giza Venture Capital and Koor Corporate Venture Capital, the venture capital arm of Koor Industries (NYSE:KOR).
Existing investors Cisco Systems, Eucalyptus Venture Funds, J.P. Morgan Partners (NYSE:JPM) (formerly Chase Capital Partners), Newbury Ventures, Pitango Venture Capital (formerly Polaris Venture Capital originating in Israel) and Texas Instruments (NYSE:TXN) have also participated.
The company said that the impressive size and global reach of the new investors provides significant financial, strategic and geographic resources to Mysticom, and should enable the company to significantly expand its presence in the data communications market. With the new funding, Mysticom said it will diversify its technology and product development by applying its patented signal processing and mixed-signal expertise to address bandwidth bottlenecks across multiple points in the network infrastructure. The company also plans to expand its development and sales efforts worldwide.
“The market for high-bandwidth Ethernet components and systems remains untouched by the difficult economic conditions affecting much of the industry,” said Dr. David Almagor, president and CEO of Mysticom. “As a result, this funding enables us to continue our expansion into the high-bandwidth Ethernet market, including the emerging 10G Ethernet market, and to broaden our product offering by leveraging our core technology in a number of other high-speed networking applications.”
Mysticom designs complex mixed-signal communications cores that have been licensed by leading communications system and semiconductor companies to deploy high-bandwidth system-on-chip (SoC) devices and communications systems based on Ethernet industry standards. As the data transmission speed of the standard approaches 10 gigabits per second (Gbps), networking equipment providers are enabling its deployment not only in the traditional local area network, but also in metropolitan and wide area networks. Cahners In-Stat Group predicts that the worldwide market for Gigabit and 10G Ethernet products will grow from $6.9 billion this year to $24 billion by 2004.
“Lehman Brothers is focused on identifying the largest growth opportunities and best management teams to be financial partners,” said Murat Erkurt, executive director, Lehman Brothers. “Gigabit and Multi-Gigabit Ethernet are some of the most promising areas of growth in the communications space, and Mysticom is well-positioned to be a leading player based on its excellent customer relationships and proven management team.”
“A relatively young company, Mysticom has managed to attract first tier clients on a global level to implement its mixed-signal IP cores in critical systems. We believe the company has laid the foundation for strong growth, which the current investment round will help it achieve,” said Machiel Papousek, senior vice president, ABN AMRO Capital.
“The close working relationship between Philips Semiconductors and Mysticom gives us a high level of confidence in the company’s technology and management team,” said Barry Dennington, vice president and general manager, Philips Semiconductors. “Mysticom’s potential for growth and ability to consistently meet development goals set the company apart. Exceptional technical competence and good business sense make Mysticom an excellent business as well as investment partner for Philips, and aligns with our strategy to continue to enrich our leading edge IP portfolio for SoC solutions in major growth markets.”
Founded in 1997, Mysticom provides DSP and mixed-signal VLSI cores for high-speed communications. The company's first product line implements the physical layer (PHY) for Local Area Networks (LANs) using Fast Ethernet and Gigabit Ethernet protocols and is used to speed the throughput of wired data communications products such as routers, switches, set-top boxes, xDSL and cable modems, and network interface controllers. Mysticom is also developing additional products for various high-speed networking markets. Industry-leading semiconductor and ASIC companies have licensed the cores, including IBM, Infineon, Philips Semiconductors, Texas Instruments and Virata Corporation.
Mysticom is headquartered in Netanya, Israel, and has marketing and customer support offices in Mountain View, Calif.
Published by Israel's Business Arena on October 10, 2001.