August 8, 2003 2:58 PM PDT

Procket searches for deeper pockets

Router maker Procket Networks is close to securing new funding that will let it battle market leader Cisco Systems beyond 2004, a source said Friday.

The new round comes from established Procket investors such as U.S. Venture Partners and Redpoint Ventures, the source said.

A funding hunt by Paul Matteucci, Procket's interim CEO, has sparked concerns that the company's once-mighty bankroll of $272 million has been depleted. But on-hand cash is "well above $40 million," and the company is in no immediate danger of shutting down, the source said.

Procket spokesman Ben Gibson refused comment on Friday.

In April, the company introduced what it said were the world's first terabit routers, beating Juniper Networks, Cisco and seven other companies to the market. The gear is for telephone companies and other enterprises that need to move huge amounts of data at very fast speeds. At the heart of the majority of these networks is equipment that operates at a speed of 1 gigabit per second. One gigabit is a billion bits; 1 terabit is a trillion bits.

But Procket's routers have been selling slowly. So far, Procket has only been able to muster orders from the broadband division of Japanese phone giant NTT DoCoMo and its U.S. partner, NTT/Verio. Analysts predicted that Procket would have a rough time, because its main customers in the telecommunications industry have been battered by the slow U.S. economy.

 

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