21 October 2003 Morrisville, NC Lightwave -- LVL7 Systems, a provider of merchant IP software for Layer 2, 3 and 4 enterprise, access, wireless and metro Ethernet products, announced today that it has secured $15.8 million in an oversubscribed, Series B funding round. The funding was led by Carlyle Venture Partners, the venture arm of The Carlyle Group. The financing round included previous investors Gabriel Ventures Partners, H.I.G. Ventures and Research Triangle Ventures.
"We are pleased to attract a venture firm of the caliber and international scope of Carlyle in this challenging financial climate," said LVL7 CEO Dr. Albert Bender. "This new funding positions LVL7 to become the premier provider of merchant IP software worldwide."
The FASTPATH software suite allows OEMs, original design manufacturers and contract manufacturers to rapidly and economically bring Ethernet switches into volume production. The software suite features an integrated networking architecture and advanced protocols for enabling revenue-generating services.
"The Carlyle Group believes that LVL7 is a leader in a market experiencing explosive growth," said Brian Hayhurst, managing director at Carlyle Venture Partners. "The company's experienced management team, its proven, feature-rich, high quality software and the significant customer traction are all indicators of its current and future success. Carlyle looks forward to using our global resources to aid in LVL7's planned expansion in Europe and Asia."
The company will use the funds to support the rapid growth of its enterprise, access and metro merchant IP software business and to continue the development of advanced software features to address new market opportunities. Since its September 2002 funding announcement, LVL7 has forged alliances with leading Ethernet silicon vendors and has fully integrated its award-winning FASTPATH software on Broadcom, Infineon, Intel, Marvell and SwitchCore technologies. The company has gained customer traction globally and recently announced a design win with NETGEAR, an enterprise-focused OEM customer that delivered a Layer 3 gigabit switch to market in less than 90 days using FASTPATH software.
"Network equipment vendors are under pressure to improve profitability," said Philip Summe, general partner at Gabriel Venture Partners, "and they are using LVL7's robust software products to help them do just that. From the financial community viewpoint, this clear market opportunity for merchant networking software combined with LVL7's traction with Tier 1 OEMs has created investor demand."
A recent report from research firm Infonetics supports the growing opportunities in the Ethernet/IP market. "Worldwide totals for Layer 2 and Layer 3 Ethernet switch revenue are expected to grow 21% between 2003 and 2006, from $11.2 billion to $13.6 billion," said Neil Osipuk, directing analyst at Infonetics Research. "We see IT budgets increasing and demand picking up in the enterprise sector, including demand for Layer 2 and Layer 3 Ethernet switches."
FASTPATH is an embedded networking software architecture that features advanced Layer 2 switching, Layer 3 routing and Layer 4+ applications and protocols. Now in its third generation, FASTPATH provides all of the production quality code required to build advanced networking infrastructure products. FASTPATH runs across multiple embedded operating systems including VxWorks and Linux and is integrated with network processors, coprocessors, and networking ASICs from leading merchant silicon providers.