Mahi Networks, an industry-leading supplier of multi-service metro packet switching, TDM grooming, and re-configurable photonic transport systems, announced today that it has closed $70 million in new funding. This funding enables Mahi to expand manufacturing and to support operations for continuing deployments of its products, and brings the total capital raised by the company to more than $255 million. In a separate release today, Mahi announced that it acquired Photuris, Inc. to complement its flagship Mi7 multi-service core aggregation system by adding the Vx7 multi-service transport system to its product portfolio, marking a strategic transition from a single-product vendor to a provider of a complementary portfolio of products that increases operational efficiencies and lowers costs throughout the metro transport and switching infrastructure. On a pro-forma, consolidated basis, the total investment to date in the Mahi product portfolio and corporate infrastructure is more than $375 million, creating a formidable competitor for both emerging and incumbent suppliers, and providing a significant business advantage to Mahi’s growing global customer base.

“This round of financing is a significant validation of our commercial progress.  It is an enabler for sustained market leadership as a true ‘next generation’ networking equipment supplier at a time when very few such rounds have closed in the telecommunications sector. The consolidated Mahi Networks is now empowered with two field-proven and complementary best-in-class G/A products, a highly respected world class team with critical mass in all functional areas purpose-built to serve the most demanding carriers, and $70 million that funds our operating plan to profitability with a substantial, planned financial cushion,” said Chris Rust, president and CEO of Mahi Networks. 

Rust continued,  “Both Mahi and the former Photuris have been shipping systems into production networks at leading carriers since August 2003 with excellent field results.  Our investor consortium has sent a clear message to the service provider community that Mahi Networks is ready and able to help them achieve greater business success through sustained technology innovation and operational excellence.  We sincerely appreciate this vote of confidence from our existing and new investors, and the vocal support many carriers provided during the funding process via purchase orders and positive references to help make this important milestone happen.”

"Closing a $70 Million financing round in today's market is remarkable. Clearly Mahi was able to demonstrate field proven ability to optimize the metro core and get service providers to go to bat for them," said Michael Kennedy, Network Strategy Partners. "Mahi has quietly emerged as a technology leader in next generation integrated multi-service metro packet switching, TDM grooming and high capacity metro core aggregation. The addition of the Photuris automated optical transport system for high capacity, large node count metro and regional DWDM rings with single wavelength engineering and 100% wavelength re-use rounds out Mahi's overall value proposition. Mahi is becoming an established supplier that will be a tough competitor in both the telco and MSO arenas. A key benefit that Mahi is bringing to the industry is a new level of network automation in both inside plant engineering and inter-office transport. The Op-Ex savings from Mahi Networks will be an important factor in justifying the transition to this next generation solution. The timing of this financial infusion couldn't be better as carriers are ready now to modernize their metro cores."

A syndicate of eight leading private equity firms contributed to Mahi’s financing. Participants in the round included Jerusalem Venture Partners, Meritech Capital Partners, Oak Investment Partners, Rho Ventures, St. Paul Venture Capital, Van Wagoner Capital Management, and Wasserstein Ventures.

Bandel Carano, General Partner, Oak Investment Partners added, “The Mahi investors are delighted with the progress Mahi has made to date. Mahi is proving that an innovative team with deep carrier infrastructure expertise, a commitment to excellence, and a compelling value proposition based on sound business fundamentals can conduct commerce with network service providers large and small.  The addition of Meritech Capital Partners as a significant new investor confirms the strength of the Mahi value proposition, team, technology, and customer testimonials.  The smooth integration of the Vx7 DWDM product, the Photuris team, and most importantly that company’s customer base and trials, is an indication that this is a group of entrepreneurs that is serious about building a franchise and knows how to execute to win.”

“Mahi Networks has always been dedicated to the task of helping carriers build better networks,” said Bill Cadogan, General Partner, St. Paul Venture Capital. “They are moving into a phase of aggressive revenue growth, have a solid base of products to sell and qualified customers to sell them to, and are now properly capitalized for the substantial commercial opportunity that they have created. A substantial window of opportunity has been created for Mahi by the deep cuts at the legacy equipment vendors over the past three years in both staffing levels and R&D investment.  The investor syndicate has chosen Mahi as the emerging transport and switching equipment vendor that will succeed in this strategic multi-service metro market segment.  Any question of “Corporate Viability” has officially been taken off of the table.”

About Mahi Networks

Mahi Networks, Inc. develops and markets multi-service metro transport and switching platforms that enhance the business models of service providers worldwide. Mahi's Mi7 and Vx7 products, integrated intelligent control plane, advanced network management platforms, and easy to use network planning tools provide industry-leading packet and TDM integration with fully automated optical services. Mahi couples its innovative technology with flexible applications that enable service providers to efficiently manage the transition to a simpler, lower cost, and converged infrastructure, thereby enabling accelerated service fulfillment and significantly greater value creation for the stockholders of service providers. For more information please visit www.mahinetworks.com.  Mahi Networks, Mi7, Vx7 and the Mahi Networks logo are either registered trademarks or trademarks of Mahi Networks, Inc. in the United States and\or other countries. The names of actual companies and products mentioned herein may be the trademarks of their respective owners.