 |
 |
 |
 |
 |
 |
 | ||
|
|
||
News Releases
Broadband Provider New Edge Networks Gets $140 Million Funding; Strong Support for Upstart’s Execution and Broadband Potential
VANCOUVER, Wash. — (October 18, 2000) — Despite volatile capital markets, New Edge Networks today announced it has raised $139.9 million in a third round of funding, bringing total invested capital in the company to $302.6 million raised in just 15 months since it was established to provide wholesale broadband DSL services nationally in underserved small, midsize and semi-rural markets.
New Edge Networks raised $76.9 million in private equity and received another $63 million in debt financing. New Edge Networks will use proceeds to fund its market expansion and to generate additional revenues from the sale of broadband and other value added services in existing and new markets.
GS Capital Partners III, L.P. and affiliates, an investment partnership of Goldman, Sachs & Co., led the private equity round and joined the New Edge Networks’ board of directors. Existing New Edge Networks investors participated in this round demonstrating their confidence in New Edge Networks’ ability to execute its business plan and the company’s strong market position and growth potential.
“Demand for broadband and other value added services in underserved smaller cities and towns is a significant growth and investment opportunity as evidenced by the level of interest and commitments from respected top-tier private venture firms, international financial institutions and worldwide technology firms,” said Dan Moffat, president, CEO and co-founder of New Edge Networks.
“Broadband is gathering steam and broadband DSL gets better daily. Broadband will be very successful for one simple reason, people want it. In smaller communities, broadband DSL technology is particularly well suited because of its broad coverage and in many instances it is the only broadband option for residential and business customers,” Moffat said.
“From the beginning our team has remained focused on speed to national coverage, becoming first or an early market entrant,” Moffat said. “We are building a great company with valuable assets in cities and towns where there is minimal competitive network overlap. New Edge Networks is the only national wholesale broadband services provider in small, midsize and semi-rural markets.
“Our successful financing round validates that there is ample access to capital for companies that have solid asset bases and that can execute,” Moffat said.
Since last December, New Edge Networks has installed broadband DSL network equipment in more than 550 telephone company central offices in 28 states. More than 390 of these sites are now operational for broadband DSL service in more than 250 cities and towns in 20 states.
New Edge Networks also built a national data communications network that allows its customers to bypass major portions of the public Internet and avoid growing traffic congestion. The national backbone network is based on Asynchronous Transfer Mode, or ATM, technology capable of handling data, voice, video and other value-add services.
“Clearly, New Edge Networks has demonstrated an ability to execute. The company is well positioned to capitalize on broadband opportunities in secondary markets nationwide,” said Rob Gheewalla, of Goldman, Sachs & Co. and the newest member on New Edge Networks’ board of directors. “We are delighted to have been selected to lead the current round of financing at New Edge Networks.”
New Edge Networks raised $15.2 million in June 1999 and an additional $62.5 million last January. In addition to the private equity, New Edge Networks previously received $85 million in vendor financing and credit facilities. Other investors who back New Edge Networks include: Accel Partners, Palo Alto, Calif., Comdisco Ventures, a division of Comdisco, Inc.; Crosspoint Venture Partners, Woodside, Calif., Greylock, Boston, Mass.; Meritech Capital Partners, Menlo Park, Calif.; Morgan Stanley Dean Witter and New Edge Networks' management team.
Broadband DSL technology uses existing standard telephone wires in homes and businesses to enable access to the Internet and corporate data networks at guaranteed speeds of 1.5 million bits per second or faster compared to 28,800 or 56,000 bits per second through dial-up analog modems. In addition to guaranteed speed, other key benefits of broadband DSL technology include an “always on” connection eliminating dial up or waiting; secure access using dedicated facilities; and reliability because the network is monitored around the clock.
For business customers with dedicated leased lines from the local telephone company, business-class broadband DSL technology generally provides the same speed at half the monthly cost. Business-class DSL transmits and receives data at the same speed and is ideal for large graphic, text, audio and video file exchanges, company networking and collaborative functions.
About New Edge Networks
Based in Vancouver, Wash., New Edge Networks was founded in June 1999 to provide wholesale broadband DSL service nationally in small, midsize and semi-rural markets through local, regional and national Internet service providers, communications companies, and other strategic relationships. The company is certified to provide service in 49 states, and is focusing on introducing data service first and later overlaying voice, video and other value add services such as frame relay. The company’s national ATM backbone network currently has more than 550 nodes making it one of the largest in the country. The company's Web site is www.newedgenetworks.com.
Contact:
Sal Cinquegrani
(360) 906-9723
ATTN: New Edge Networks news releases contain information that is accurate as of the date they are issued. Information contained in past news releases may become out of date and the company does not assume responsibility for updating information contained in past news releases.