PALO ALTO, Calif. – Communications Ventures exclusively invests in early-stage communications and networking companies across the United States. The firm focuses on network management, data networking, Internet infrastructure, computer telephony, voice processing, mobile communications, fiber optics and high capacity switching.
Communications Ventures’ most recent vehicle, Communications Ventures III, was launched last summer and held a final close in October on $125 million. New limited partners include Harvard Private Capital, Ameritech Pension Trust, Knightsbridge Advisors, Hamilton College, and U.S. Trust. They joined existing investors which include Bank of America, Mutual of Omaha, Tellabs Inc., University of Richmond, HarbourVest Partners and Minnesota Mutual Life Insurance. Communications Ventures III at press time was close to finalizing its first three investments. General Partner Roland A. Van der Meer would not disclose details but said they involved an application service provider, a company working on solving data bottlenecks in telephone networks and a provider of a data services and switching platform.
Communications Ventures II closed in October 1997 at $ 75 million and was preceded by the $12.5 million Communications Ventures I in 1987. Both vehicles are fully invested.
Communications Ventures, which prefers to be the deal originator but will also function as a co-investor, is particularly interested in companies with a unique market niche that will develop into big growth sectors. “If you want to hit a home run, you must look at a big growth market that’s not there yet,” Mr. Van der Meer said. The firm invests between $200,000 at the incubation level to a maximum of around $7 million throughout a company’s life. Average first-round financings range from $2.5 million to $3 million, and the firm’s partners usually take board seats.
Communications Ventures is led by three men with extensive experience as managers, directors and investors in the communications industry. General Partners Clifford H. Higgerson and Mr. Van der Meer founded Communications Ventures in 1987 after working together at Hambrecht & Quist. In the early 1990s, with little interest in communictions investments, the partners put the firm’s activities on hiatus while they worked in other positions in communications and venture capital. After five years and amid a growing interest in communications investments, they relaunched the firm in June 1997. In early 1998, David P. Helfrich joined as a general partner, and there are plans to bring in a fourth partner in the second half of 1999, Mr. Van der Meer said.
Following are select Communications Ventures portfolio companies:
Arroyo Optics (Santa Monica, Calif.) has developed an all-fiber high performance optical router for wavelength division multiplexing networks.
Brentwood Associates is co-investor.
Authentix Networks Inc. (Tucson, Ariz.) provides a fraud detection service that authenticates cellular phone users who make calls outside their home territory.
Co-investors are Vanguard Venture Partners, IAI Ventures and Illuminet.
Coaxicom (Long Island, N.Y.) is a competitive local exchange carrier that uses its proprietary software applications to address the telecom needs of residential and small- to medium-size businesses.
Weiss, Peck & Greer and New Enterprise Associates are co-investors.
Chromatis Networks (Bethesda, Md.) provides optical networking equipment to the carrier market.
Crosspoint Venture Partners and Jerusalem Venture Partners are co-investors.
Ellipsys Technologies (Santa Cruz, Calif.) develops intelligent network analysis systems for telecommunications service providers.
Aspen Ventures, Equity Ventures, Vanguard Venture Partners and Tredegar Investments are co-investors.
Monterey Networks (Dallas, Texas) is developing a new generation of scaleable broadband cross-connect systems to upgrade the carrier SONET transmission infrastructure.
JAFCO America Ventures, Sequoia Capital and Sevin Rosen Funds are co-investors.
Pluris Inc. (Palo Alto, Calif.) designs a new class of scalable Internet Backbone Routers that could help eliminate the bottlenecks currently plaguing the Internet backbone.
Weiss, Peck & Greer, IAI Ventures, Vanguard Venture Partners, Bay Partners, DynaFund Ventures and Piper Jaffray Ventures are co-investors.
Praxon Inc. (Campbell, Calif.) develops an all-inclusive business communications solution that combines voice, data networking, messaging and Internet access for small- to medium-size businesses.
Draper Fisher Jurvetson, Canaan Venture Partners and B.J. Cassin are co-investors.
RangeStar International (San Francisco) has developed a patented antenna technology that doubles the range of cellular telephones and other wireless devices.
B.J. Cassin is a co-investor.
Tollbridge Technologies (Mountain View, Calif.) is developing a new class of network access products for local exchange carriers.
Matrix Partners is co-investor.
Zeus Communications Systems (Annapolis, Md.) provides secure wireless products for business, industry and finance.
IAI Ventures, Phoenix Technologies, Digital Microwave, Don Lucas and B.J. Cassin are co-investors.
Communications Ventures is located at 505 Hamilton Avenue, Suite 305, Palo Alto, CA 94301, tel. (650) 325-9600, fax (650) 325-9608. For more information on the firm, see its Web site at www.comven.com.