P-Cube

P-Cube prefers that foreign, rather than Israeli, investors lead the round. It expects to reach break-even in late 2004.

Batya Feldman

Start-up P-Cube is raising $25 million in its fourth financing round. Sources inform “Globes” that the company wants to hold the round at a company value of $100 million, and that it prefers that foreign, rather than Israeli, investors lead the round. P-Cube CTO and Israel general manager Michael Ben-Nun said yesterday, "P-Cube is in excellent shape. The number of orders is growing. I cannot comment on the financing round."
In April, Ben-Nun told "Globes" that the company's sales graph for the last two quarters in 2003 rose several hundred percent and that the company would reach break-even in late 2004.

P-Cube, which began selling its products two years ago, develops IP service control systems. The company's technology measures and analyzes data traffic. Its service control products improve a communications operator's ability to analyze and control network IP traffic, and create pricing models according to types of usage. These solutions gives operators flexibility in providing services, cutting operating costs, and creating new sources of revenue.

P-Cube has been of the top capital-raising Israeli start-ups since it was founded. It has raised $74 million to date, including $40 million in its previous financing round two years ago. If it succeeds in raising the entire amount it is currently seeking, it will have raised $100 million altogether.

p-Cube has apparently survived the hard times. It laid off 30% of its work force two years ago, mostly at its Israeli R&D center.

Sources close to the company said P-Cube had very few competitors in the Internet service providers (ISP) market. Its main competitors are giants Cisco Systems (Nasdaq:CSCO) and Juniper Networks (Nasdaq:JNPR). P-Cube has the technological edge over its competitors, making a possible target for acquisition.

Three men founded P-Cube: president and CEO Yuval Shahar; chairman Dr. Giora Yaron, a serial entrepreneur and former CEO of HP-Indigo; and director Benny Schnaider, a former executive at Cisco.

P-Cube won the "VentureWire" Investor's Choice Award at its 12th Annual Network Outlook Private Equity conference in March 2004. The award recognizes start-up technology companies that are best positioned for long-term success in the data communications industry. The award followed a good year for P-Cube in 2003. A few months ago, it announced it was hiring staff in order to cope with a wave of orders. Today, it announced a new contract with Copel Telecommunications of Brazil, to supply its IP traffic and wireless services management and optimization products.

In January, P-Cube announced that UTStarcom, which develops IP access networking, services, and mobile communication products, would integrate P-Cube’s products in its systems. UTStarcom has $1 billion in annual sales.

Published by Globes [online] - www.globes.co.il - on July 13, 2004