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Backhauler Tower Cloud Hauls In $20M As Atlanta Goes 4G

10/21/2009

St. Petersburg, FL (VentureWire) -- As it helps the city of Atlanta roll out a fourth-generation cellular network, backhaul provider Tower Cloud Inc. has raised $20 million from its existing venture backers and a group of new investors led by veteran telecom entrepreneur Cam Lanier.

The new investors are Ballast Point Ventures, Burton Partnership, Kinetic Ventures, Knology Inc., ITC Partners Fund and Noro-Moseley Partners, the company said. Tower Cloud's existing investors -- who gave the company a $10 million first round in 2006 -- are El Dorado Ventures and Sutter Hill Ventures.

Tower Cloud lays fiber lines between wireless carriers' distributed cell sites and their central switching centers, enabling them to transfer more data more quickly, Chief Executive Ron Mudry said.

Network traffic management - also known as data backhauling - has become increasingly important for carriers as they struggle to keep up with the strains put on their networks by smartphones and the rich data they send and receive.

While incumbent phone companies are able to do much of their own backhauling, they also turn sometimes to start-up companies who specialize in routing data. Among Tower Cloud's VC-backed competitors is Seattle-based Telecom Transport Management Inc., which has raised more than $65 million.

Founded in 2006, St. Petersburg, Fla.-based Tower Cloud spent the first few years of its existence serving Orlando and Miami. But the company is now working in Atlanta, where several wireless carriers are racing to build out a next-generation, or 4G, network to handle the explosion of rich data on the airwaves.

"We are providing high-capacity transport, and for the first time, Ethernet services," he said.

Mudry declined to say which wireless carrier is buying Tower Cloud's services. Several carriers are working on network upgrades in Atlanta -- and the rest of the country -- he said.

Campbell B. "Cam" Lanier, who led the investors' group in Tower Cloud's second round, is a well-known telecom entrepreneur and investor. He was a co-founder and chairman of ITC Holding Company, which has made a number of early-stage investments in telecom, technology and financial-services companies, according to an online resume.

Prior to forming ITC, Lanier formed Interstate Communications, which was sold to MCI in 1990 for a reported $1.2 billion. He was also a founding investor and chairman of PowerTel, which was acquired by Deutsche Telecom for $4.2 billion in 2000.