DALLAS--Cisco Systems has invested $60 million
in an Austin-based start-up that sells high-speed data services to
business customers in small and medium-sized cities, the companies
are expected to announce today.
The
Cisco move will triple the amount of capital raised by privately
held Vectris Communications, which started service in Central and
Southwestern states last month.
Neither Vectris nor Cisco would say what equity share, if any,
Cisco will get in exchange for the funding.
Vectris hopes the Cisco name will help open doors at small and
medium-sized business customers. The company is targeting cities
with populations smaller than 300,000, which have been largely
ignored by the major data-services companies.
"It's definitely a group of cities that the big three have opted
not to cover," said John Moshier, chief technology officer and
senior vice president at Vectris. "There is tremendous opportunity
in these markets."
Vectris seeks to strike deals with Internet service providers,
application service providers and phone companies to sell packaged
networking services over high-speed digital subscriber lines, or DSL.
Research firm International Data Corp. predicts revenue from DSL
service to businesses will hit $2.6 billion in 2002.
By October, Vectris plans to operate in 10 states served by
Southwestern Bell and Ameritech.
Vectris was formed in October by executives from long-distance
phone companies and so-called CLECs, competitive local exchange
carriers. Chief executive Carey Balzer ran a CLEC and the
small-business unit for Denver-based US West. Moshier was an
executive at Sprint.
Moshier said he does not expect Vectris to be profitable in the
next two years.
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