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Tuesday, February
26, 2002
Innovance nets $88M
Venture capital pours in despite hi-tech slump
By Geoff
Matthews, Money Editor
AN
OTTAWA startup has landed $88 million in financing on the same day
as a national survey showed firms in the region brought in $1.1
billion in venture capital during 2001.
Innovance Networks,
a privately held optical networking company, will use the money to
support the commercial launch of its photonic networking system,
which will be manufactured at the company's new operations facility
in Ottawa.
The two-year-old company is no
stranger to the VC markets. At the end of 2000 it raised $115
million and has brought in a total of more than $233 million since
its launch.
"We are now well funded through 2003," said COO
James Frodsham --good news since he expects this year to be a tough
one.
"We could see some revenue in the second half of this
year," said Frodsham, but strong market growth is unlikely until
2003.
In addition to Corning and JDS Uniphase, the financing
round included Advanced Technology Ventures, Morgenthaler, Thomas
Weisel Capital Partners, Azure Capital, Banc of America Securities
LLC, Kalkhoven, Pettit & Levin Ventures and Archery Capital.
A survey released yesterday by the Canadian Venture Capital
Association (CVCA) and Macdonald & Associates showed that more
than $1 of every $5 in venture money in Canada last year poured into
the national capital region during a period in which the hi-tech
sector was blasted by a worldwide economic downturn.
INVESTMENTS IN HI-TECH
Huge investments in companies
like Ceyba, which raised $144 million, and SS8 Networks Inc. with a
$96-million deal, set the tone for the year.
"The results
were particularly positive given that our friends to the south
witnessed a 65% plummet in capital invested in 2001," said a
statement released by the agencies to accompany their annual survey.
"This is in large part due to a more diversified investment
strategy in Canada as opposed to the more Internet-focused strategy
of U.S. venture investors."
Fibre-optics and photonics
grabbed the most cash, followed by wireless communications
equipment, wireless service providers and telecommunications
equipment.
Next story: Ski
hill acquisition on course
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