The Michigan Office of Retirement Service (ORS)
and
two other unnamed, “large” institutional investors have high hopes for a
13-year-old company that is developing a new approach to fiber-class broadband.
The three investors took part in Tarana Wireless, Inc.’s $170 million
round, which was co-led by Axon Capital, Khosla Ventures, and Prime
Movers Lab and included I Squared Capital. The financing valued
Milpitas, California-based Tarana at $1 billion.
A spokesman for the $100 billion ORS declined to comment on the investment.
In an interview with Markets Group, Steven Glapa, Tarana’s vice president of
marketing, said the company – using Barclays as a placement agent – began
raising what it hoped would be a $100 million round in November. Finding itself
oversubscribed, Tarana closed the round in late February at $170 million.
Glapa
declined to discuss the institutional investors individually but said that
Tarana was attractive to them because the company has potential to generate a
strong return and is on track to go public in the “next 12 to 18 months.”
Having the institutional investors on board will also be positive when the
company does indeed go public, Glapa said. He also said that the institutional
investors came in directly to the round and were not investors in the other
venture firms that led the deal. Tarana, according to venture industry tracker
Crunchbase, has now raised some $375 million in total funding.
Institutional investors have long been open to co-investing or even doing
direct deals in private equity-related transactions. More, however, have shown
a recent interest in venture deals. However, with valuations of companies
beginning to fall, institutional investors may take a more cautious approach to
such deals.
Tarana has developed a platform which it says delivers fiber-class internet
service to service providers at a fraction of fiber’s cost and complexity.
Having grown its customer base to more than 120 service providers, including
MTN, BT and Liberty, Tarana is on track to generate more than $100 million in
revenue in 2022, Glapa said. He said the funding round should be the last before
an IPO – “unless something horribly goes wrong.”
Michigan had 23.1% of its capital allocated to private equity at the end of the
2021 fiscal year, September 30. The sector generated a return of 54% for the
year. Overall, the pension fund saw a 23% return during the year.
