A company that had raised about $70-80 million in venture capital has been sold for a song. The US and India based WiMax products company Telsima Networks has been sold to US based wireless service provider Harris Stratex Network for a mere $12 million. What makes the deal worse is that this amount will be payable only over the next 12 months. Investors in Telsima stand to lose a lot of money since the WiMax company had raised nearly $80 milllion since it was founded in 2000.
The investors in Telsima are NewPath Ventures, CMEA Ventures, New Enterprise Associates, Intel Capital and JAFCO Asia. It raised series-D round of $50 million in 2007, and $20 million in 2005. It also managed to raise $25 million in venture debt from Silicon Valley Bank.Dr Alok Sharma is the company CEO while Vinod Dham is the chairman.
Reports suggest that tghe existing investors were unwilling to cough up more dollars to keep the company afloat. The development comes when Telsima was getting some traction on the client side.
Telsima is headquartered out of California, and also has offices in Bangalore, Gurgaon and Mumbai in India. The two companies, Telsima and Nasdaq-listed Harris Stratex, had entered into a partnership agreement in September 2008 for end-to-end 4G network solutions.
Harris Stratex seems to be getting a pretty cheap buy. Telsima has built an extensive product portfolio in the WiMAX space. The company has also been getting traction now winning clients like Tata Communications and South Africa's Neotel (in which Tata holds 56% stake). It has also emerged as a frontrunner along with Huawei to bag BSNL’s order for WiMAX network rollout. It also has a presence in Eastern Europe and Russia.
“In our close working relationship with Telsima we have been greatly impressed by their technology and expertise. We believe the combination of those qualities and Harris Stratex in-house innovation will significantly enhance our ability to expand into new and emerging markets," said Harald Braun, president and chief executive officer of Harris Stratex Networks.