NETCENTREX

NETCENTREX

NetCentrex developed advanced network voice and video solutions that optimize network infrastructure and allow telecom operators and service providers to deliver voice-video-data and fixed-mobile converged services for both the consumer and enterprise markets. The company grew to become a market leader and was acquired by Comverse in May 2006.

Company Creation

In the process of scouting for unique investment opportunities, we studied France Telecom’s TULIP (Telephone Utilisant des Liaisons IP) project. This R&D project was co-led by Olivier Hersent and Bernard Jannes. They were focused on assessing the application of the nascent voice over IP (VoIP) technology. Their team went on to develop tools and technologies to facilitate deployment of value added services over IP for service providers, and filed several patents. Realizing the power of the technology, we guided the creation of a business plan to spin the technology out into a new company, NetCentrex.

Financing

To accelerate service deployment and growth, we purchased all assets and patents from France Telecom in 1999 and led three successive financing rounds (between February 1999 and October 2000), raising a total of $34 million.

Growth

The Company quickly recorded its first successes, selling VoIP value added service platforms to several US service providers including Pagoo and Genuity. In 2000, NetCentrex made its first major sale to Equant, Global One followed suit. In October 2000, seeking to accelerate growth and profitability, we assisted the Company with the acquisition of MG2 to diversify into the call center business. The move proved to be the right one at the right time: the combination of NetCentrex’s technologies and MG2′s media servers enabled NetCentrex to build a whole solution addressing virtually all needs of VoIP service providers. During the difficult post-bubble year, the profitability of MG2’s existing business funded VoIP product development, and NetCentrex continued to grow.

In 2003, the Company began reaping the rewards of its foresights. Fastweb, the top service provider in Italy, decided to leverage VoIP to offer telephony services and complement the service with IPTV, inventing “Triple Play.” In 2004, Orange – the second largest mobile operator in the world – began to deploy VoIP with NetCentrex across France, Netherlands, UK, Spain and Poland. The Orange network quickly became the largest VoIP deployment in the world with over 50,000 subscribers adopting the service every week. By 2006, NetCentrex had become the market leader with 450 employees and over 25% share of the VoIP server market.

Exit

In May 2006, Comverse, the world’s leading multimedia software and systems provider, purchased NetCentrex for $186 million in cash.