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Financing Solutions that Fit
Highly touted telecom startup Innovance Networks has raised $26.5 million in debt financing, the Ottawa Business Journal has learned.

Toronto-based MM Venture Partners (MMVP), which recently debt financed Tropic Networks, was the sole Canadian investor in a four-company syndicate. MMVP put up $6.5 million, while three American financiers chipped in $20 million. According to an Innovance spokesperson, the specifics of the deal will be announced at the end of the month.

The company declined to comment on rumours that it is on the verge of closing a strategic investment - the centrepiece of the company's recent financing efforts - worth in excess of $45 million. For now, the company is focused on moving forward. "We're still in development and growth mode, so we'll be using this money to build up our laboratory facilities and IP infrastructure," says Innovance chief financial officer Wayne Edmunds.

Innovance emerged on the local tech scene last December with a record-breaking $115-million VC deal. The company operates in the long-haul networking industry. Minhas Mohamed, managing partner of MMVP, says the Innovance deal rounds out his company's three-pronged optical sector strategy. The venture firm wanted something in the last mile and invested in a Vancouver company called fSONA, which addresses the last mile through free-space wireless laser technology. It also wanted something in the metro space, which the Tropic deal satisfied. The last component was a company addressing the long-haul market, which is where Innovance fits in.

"For us, it completes our strategy in the optical sector. They're our long-haul play." Edmunds says the attraction is mutual. "It was a treat for us to become associated with MM Venture Partners because they've picked a lot of winners."

Ottawa has become a definite target area for MMVP, says Mohamed. "We have found over time that the calibre of management and technology that exists in Ottawa is second to none in Canada."

Posted in: Communications

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