World Wide Packets, the Spokane Valley-based maker of devices for fiber-optic communications, is pumping the $24.5 million in venture funding it landed recently into networkingin the social sense of the word.


The company, launched by Ethernet guru Bernard Daines in 2000, has begun investing its capital in international sales efforts and business-partnership development, says David Curry, its president and CEO. If those initiatives are successful, World Wide Packets could reach profitability next year, he says.


This last round of funding is a reflection of the growing maturity of this company in an industry thats showing signs of rebounding, Curry says.


A number of firms contributed to the recent round of funding, including Spokane-based Northwest Venture Associates, Seattle-based Madrona Venture Group, Boston-based Argo Global Capital LLC, and New York-based Entrepia Ventures.


World Wide Packets is using those funds to target new business in countries that are beginning to develop fiber-optic networks, Curry says.


The Spokane Valley company primarily makes the hardware and software needed to deliver to homes and businesses any combination of telephone, television audio and visual, broadband Internet, and other high-speed data communications using Ethernet technology over a fiber-optic and copper cable. Its typical customers include municipalities, public utility districts, telecom providers, and cable companies.


World Wide Packets currently employs 70 people, about 60 of whom are here. The other 10 are located at an office in London and scattered abroad. It contracts out its manufacturing primarily to Plexus Corp., of Neenah, Wis.


The company has been selling products in Europe and a few other countries for three years, but now plans to bolster its international marketing efforts, primarily in the United Kingdom, Scandinavia, the Middle East, New Zealand, Japan, and China, Curry says. China is a key focus because its growing economy is fueling the need for next-generation communication networks, he says.


Business in China has surged since it landed the 2008 Olympic Games and received World Trade Organization membership in 2001, Curry says. That economic growth has prompted the country to begin building a communication infrastructure, creating a demand for networking equipment, he says.


World Wide Packets is in the process of selling equipment to its first customer in China, an Internet service provider called Great Wall Broadband, Curry says.


Barry Kantner, World Wide Packets vice president of marketing, says that initial testing of that equipment began three months ago, and that World Wide Packets expects to secure a deal with Great Wall Broadband this week.


Making connections


Meanwhile, Curry says that World Wide Packets is looking to develop partnerships with other, larger companies that may be interested in using its products to complement their own. The company expects such partnerships will help strengthen its sales efforts, he says.


The large equipment vendors have sales forces all over the world where we couldnt afford to have one, he says.


Partnerships will offer advantages to both World Wide Packets and the large vendors, Curry says. World Wide Packets will gain customer confidence as those vendors assume the risks associated with startups, and the vendors in turn will gain access to World Wide Packets product research and development, which some companies cut after the technology downturn, he says.


The Spokane Valley company has bid on a number of projects with large vendors, and expects within the next six months that one or more will begin reselling its product globally, he says.


The increased sales capacity should allow World Wide Packets to sell more products at higher margin, enhancing its bottom line, Curry says.


The company raised $94 million in venture capital in its previous rounds of fund-raising, and much of that money was invested into product and market research, Curry says. Shifting the companys focus to sales and creating business partnerships will help move it toward profitability, he says.


World Wide Packets has seen steady growth in revenues over the last three years, and its rate of growth has been accelerating this year, Curry says.


Kantner says the company hopes to hit about $20 million in revenues this year.


Curry says he expects World Wide Packets international sales to grow faster than its domestic sales, given that it has gained more international than domestic customers in the last 18 months.


Nevertheless, its continuing to push hard to solicit U.S. customers, as evidenced by a pact it landed last month with a county planning district in Virginia, Curry says. World Wide Packets is providing that agency with its LightningEdge lineup of products, including access portals and distributors, which will enable the district to offer fiber-optic connections to customers there.


Also, the company is supplying equipment for a $40 million project in Provo, Utah, which will be used in a fiber-optic network that will deliver access to 125,000 people and pass through 30,000 homes and business buildings, Curry says.


The company says demand for its equipment should grow because local-government jurisdictions that use it are attracting more businesses to the communities they serve by offering inexpensive bandwidth.


Communication networks are being viewed by community leaders as important as roads and sewers, he says. You wouldnt locate your business to a place without a sewer system, so why would you locate your business to a place with no, limited, or expensive broadband?


World Wide Packets currently has 30 municipality and public-utility-district customers in the Pacific Northwest, Southwest, and on the East Coast, Curry says.


As other local governments in the U.S. emulate the Provo project, demand for high-tech communication equipment will grow, Curry predicts.


The tide is rising on municipal networking, and were at the forefront of it, he says.


Besides municipalities and similar entities, World Wide Packets hopes to attract more companies that offer a collection of telecommunication services, such as Denver-based Qwest Communications International Inc., Curry says.


With sales and revenues increasing, World Wide Packets plans to grow its work force by 15 percent this year, he says. It had employed as many as 170 in mid 2001, but got caught in the telecommunications market crash later that year and cut about 100 jobs.


Now, Curry says, Were beginning to feel the wind at our back as opposed to a headwind.


Curry says he realizes reaching profitability still is a battle for World Wide Packets because the telecommunication industry hasnt fully rebounded.


Meanwhile, the company is developing a number of new products with Internet-based audiovisual capabilities that it expects will be able to perform functions other companies products cant, a factor thats instrumental in raising additional capital, Curry says.


World Wide Packets now has enough capital to last two years, and may need to raise additional funding in a few years, Curry says. It would do so privately, or possibly through a public offering if revenue growth warrants it, he says.


For now, the young company is looking forward to the prospects of an industry awakening from a deep sleep, Curry says.


We have the potential to be a very big winner, he asserts.