Backhaul providers Fastback Networks and Sub10 Systems announced they will merge to address what is forecast to be a $1.6 billion market for sub-6 GHz and millimeter-wave solutions for backhaul. The companies are combining their intellectual property and technology platforms to create what they describe as the industry's first provider of hybrid Any Line of Sight (AnyLOS) backhaul solutions.
Kevin Duffy, CEO and co-founder of Fastback Networks, said when he and Stuart Broome, the CEO of Sub10, started to discuss their respective businesses, they determined that what the Tier 1 operators want are the best-of-breed technology that each could bring to the table. By combining, they eliminate the fear of whether each, as separate entities, would have the staying power and economical mass to be around for the long run.
"Having understood that, between us, we got very excited, very quickly that if we were to put these two companies together, that it would create something that is unrivaled in the industry," he told FierceWirelessTech.
Both companies have a number of Tier 1 operators using their products either through direct sales or OEM partner agreements. By merging, the companies create greater staying power in their combined geographies, with Fastback's strength in North America and Sub10 in Europe.
Fastback has concentrated on the sub 6 GHz arena and Sub10 in the millimeter wave space.
The combined entity will use the Fastback Networks name, retaining the headquarters in San Jose, Calif. Sub10 Systems' operations in Devon, U.K., will serve as the new European headquarters for Fastback. Duffy will be CEO, while Broome is serving as chief sales and marketing officer.
Fastback CTO Kevin Negus will remain in the CTO role, while Sub10 CTO Mark Stevens will join Negus in an expanded CTO office, where together they will be responsible for the combined company's advanced technology and product roadmap.
"I've never been involved in a business where when you try to merge two businesses together, it's not about trying to take things out, it's about what you add," Broome told FierceWirelessTech. "We're not taking out any layers." Together, the business will have more than 45 patents issued, covering line of sight (LOS) and non-line of sight (NLOS) technologies.
The newly combined Fastback will have shipped more than 10,000 units--noteworthy since both companies started only a few years ago and their customers tend to have very long buying cycles.
The segments the two companies are targeting are expected to grow 36 percent from 2014 to 2019, outpacing the remainder of the microwave backhaul market. The growth is expected to be driven by the combination of LTE/LTE-A upgrades, demand for higher capacity backhaul, and the trend toward denser cellular networks through new LTE macro cell and small cell deployments.
Fastback Networks and Sub10 collectively received financing of more than $50 million, and it didn't take long for their investors to get on board with the merger. All of the previous investors in the two companies are participating investors in the new combined company. The combined investor syndicates include Business Growth Fund, Foundation Capital, Granite Ventures, Harmony Partners, Juniper Networks and Matrix Partners.
Sub10 Systems' principle investor, the $3.75 billion Business Growth Fund (BGF), which is backed by five of the UK's main banking groups--Barclays, HSBC, Lloyds, RBS and Standard Chartered--will participate in the Fastback Board of directors as an observer.
- see the release
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