Meru Scores $30 Million In Funding

networking 802.11n

Meru's latest round of funding was led by a new investor managed by New York-based Vision Capital Advisors. Meru's existing investors, including Clearstone Venture Partners, NeoCarta Ventures, BlueStream Ventures, The D.E. Shaw Group, Evercore Partners, Tenaya Capital and Monitor Ventures, also participated.

In a statement, Meru's chief financial executive said increasing adoption of 802.11n and excitement around the latest WLAN standard is fueling the wireless market and Meru's growth, while also gaining the attention of investors.

"We are experiencing unprecedented enthusiasm for IEEE 802.11n solutions, and enterprises' rapid adoption of the 802.11n standard presents us with the opportunity to accelerate our WLAN market-share growth," Meru CFO Brett White said.

White added that companies are looking for easy to deploy, secure and manageable WLAN solutions on tighter budgets and with fewer resources.

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"The latest round of funding will give us the resources to continue our mission of solving application performance problems over wireless while meeting the strong demand we're seeing from the health-care and education markets and Fortune 2000-size companies," he added.

Meru Marketing Vice President Rachna Ahlawat said the bulk of the secured $30 million will go toward innovation in 802.11n technology and making products that accommodate the applications designed to take advantage of the higher bandwidth and availability of 11n.

"What has happened is the applications deployed on 11n are different than 11 a/b/g," she said, adding that 11n is better suited for voice, video and other bandwidth-intensive applications than for the previous wireless standards. "With 11n, you have a big enough pipe to bring in these applications. The innovation we see now is in supporting those applications."

Craig Matthias, industry analyst and principal with the wireless and mobile advisory firm Farpoint Group, said Meru's $30 million in funding is a sign that the wireless market is going to continue to grow, despite economic pressure.

"While both the economy and raising new capital remain challenging, the wireless LAN opportunity has never been more exciting," Mathias said in a statement. "We're expecting accelerating market growth, driven by both customer demand and the continuing high level of innovation addressing some of the major challenges in deploying, securing and managing large-scale WLANs."

Ahlawat agreed.

"The market is growing at a very healthy rate," she said. "Customers are replacing wired with wireless." Ahlawat estimated that the wired networking market is growing at roughly 6 percent annually while wireless is growing at a rate of 20 percent or more, mostly fueled by advancements in 11n.

Meru, which was established in 2002, has received praise for its WLAN gear. Research firm Gartner recently positioned Meru in the "Visionaries" sector of its Magic Quadrant for Wireless LAN Infrastructure for 2008. Another firm, Novarum, recently pitted Meru's 802.11n virtual cell WLAN products against the competitors, Cisco Systems and Aruba Networks, and found Meru out-performed both. Meru's solution use virtualization to deliver wireless service for voice, video and data applications and first introduced its virtual cell wireless architecture in 2003.

"In this difficult economic environment, our investment criteria limit us to choosing companies with a clear technological advantage over their competitors," Vision Capital Advisors director of tech and telecom investments, Firas Abi-Nassif, said in a statement. "Their solutions must be essential to lower costs and increasing productivity for their customers, as this provides these companies a financial advantage which offers strong protection against further deterioration in the market. We believe that Meru is a case in point, having established the dominant technological position in enterprise wireless networking by bringing the cost and performance benefits of virtualization to that arena."