Open RAN hopeful Mavenir raises another $100m

  • Mavenir is heavily involved in numerous Open RAN projects
  • It has been transforming its operations to better position itself to land bigger and broader Open RAN deals
  • But the Open RAN sector is advancing at a cautious, rather than breakneck, pace 
  • Mavenir has raised a further $100m to support its future plans

Having raised $250m in the second half of 2022 to support its ambitious growth plans, Open RAN vendor Mavenir has now raised another $100m to “accelerate” its R&D efforts as it tries to position itself as the go-to technology partner for network operators seeking to deploy open, disaggregated radio access networks. 

The $100m round is “anchored” by the vendor’s majority shareholder Siris Capital Group, though it’s unclear what this means in terms of the value of its participation. The rest of the round was funded by what Mavenir describes as “two highly strategic ecosystem partners” though, again, it’s not clear which companies these or even what kind of companies they are, or how much they have stumped up. 

This differs from last year’s fundraising, when Siris was not involved: The $250m raised in 2022 came in the form of a $95m loan in August followed by a $155m investment in October from an anonymous financial backer, with that money secured so that the vendor could spread its wings and branch out from being just a vendor to an end-to-end supplier of systems and supporting services – see Mavenir raises $155m, aims to become full system supplier to telcos.

In the announcement about the new round, Mavenir CEO Pardeep Kohli is quoted as saying the new capital injection will enable the company to “accelerate our capabilities in automation, sustainability, and use of AI as we enable our customers to efficiently deploy and operate Open RAN-based end-to-end cloud-native networks.”

And according to Hubert de Pesquidoux, Siris executive partner and chairman at Mavenir, the investment “enables Mavenir to further scale its business and maintain its leadership in Open RAN and 5G transformation. We firmly believe in the automated networks of the future that are cloud-native, AI-native and green-native, and we are confident that Mavenir’s innovations are essential in driving that evolution.” 

In response to TelecomTV’s questions about the identity of the new investors, what this round means for Mavenir’s investor profile, and the company’s current financial performance and forecast, Kohli noted: “​​We continue to invest in feature parity and customer acquisition for both packet core and Open RAN. Open RAN brings in opportunity for a number of independent semiconductor companies: It opens up the market that is currently closed for them due to proprietary systems. Siris continues to be [the] majority owner of the company. We added new equity investors in this round. These investors are aligned with us in our Open RAN strategy and are contributing to our success with their own product roadmaps and their financial strength.” 

So, no confirmation of anything specific, but a hint that some of the investment has come from the chip vendor sector, where Mavenir already has relationships with the likes of Intel, Qualcomm and Nvidia

The news comes only weeks after major UK operator Virgin Media O2 announced it had selected Mavenir to be its primary Open RAN technology partner – see Virgin Media O2 picks Mavenir for Open RAN rollout.

Mavenir and the other companies aiming to grow their businesses from Open RAN-related contracts will be hoping there are more, and much bigger, deals to come in 2023, as the Virgin Media O2 engagement is small (at least for now) and the flood of so-called brownfield Open RAN deals that other significant players, such as Rakuten Symphony and NEC, had predicted for this year have so far failed to materialise. 

Clearly, Siris and these unidentified ecosystem partner investors believe there’s more to come and that Mavenir, if positioned correctly, can pick up a decent chunk of the market, which research firm Dell’Oro Group believes is growing faster than expected and could account for up to 10% of the roughly $40bn RAN equipment market in 2023. However, the spending, it notes, is still mainly concentrated in just a few key rollouts, rather than spread across a growing number of meaningful rollouts.  

And there’s no doubt that as the Open RAN market has been growing, so Mavenir has been picking up more and more business. The company noted earlier this year that its Open RAN-related revenues had grown significantly over the past few years, from just $7m in 2020 to $100m in 2022.

But, clearly, that alone is nowhere near enough turnover to sustain a business, especially one that is raising large amounts of money for expanded and extended R&D. And while Mavenir is not a one-trick pony – it has also been growing its packet core line of business to around the $100m revenues mark – it seems like its overall company sales might have hit a speed bump, as its rich communication services (RCS) and communications platform-as-a-service (CPaaS) lines of business have been underperforming and it may not have hit its $700m-plus 2022 sales target. 

TelecomTV has said for some time that 2023 was looking like a crunch year for the Open RAN sector – it might also be a crunch year for Mavenir.   

- Ray Le Maistre, Editorial Director, TelecomTV