[More on Avici: Anschutz takes a stake]
Denver Business Journal: Anschutz opens wallet for Eastern Internet firm
Denver billionaire Phil Anschutz is banking on the future of a Massachusetts Internet company.
Anschutz has invested in Avici Systems Inc., an 18-month-old company developing new Internet technology that has not released any products.
Anschutz was part of a $55.3 million second round of financing in what some say is an extraordinary investment in what appears to be a exceptionally hot company.
"I'd call it a phenomenal amount," said Bob Valletta, chairman of the venture capital industry group in the Boston office of accounting firm Coopers & Lybrand LLP. "Considering it's a high-tech company, and the average high-tech VC deal was worth about $4 million last year, it's definitely huge."
The size of Anschutz's investment wasn't revealed, but he was part of a group of new investors that contributed a total of $7.7 million to Avici.
Funding was led by Brampton, Ontario-based Northern Telecom Ltd. (Nortel), which bought a 20 percent stake in Avici worth approximately $38.75 million.
Anschutz's investment was made through the Anschutz Family Investment Co., which is owned by the Anschutz Co., of which Phil Anschutz is president.
Anschutz, who made his fortune in oil, real estate and railroads, has fast become a player in the telecommunications industry. He is the founder of Qwest Communications International Inc., which is working with the federal government to develop a next-generation Internet for use by academics, and a number of other telecommunications companies. Englewood-based Internet Communications Corp., which counts Anschutz as a primary shareholder, builds and and manages private voice and data networks for businesses.
Why the interest in Avici?
What everyone is so hot about is the promise of Avici's multiterabit switch and routing technology, considered to be the next generation of data transmission technology for the Internet.
Terabit technology can support networks with tens of millions of dial-up connections. Trillions of pieces of data, including voice and video services, can be transferred at once over a single network backbone.
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