Hatteras Networks Plans Major Expansion With $21M in New Funding

, a provider of networking gear that enables service providers to deliver broadband services over existing copper infrastructure, is gearing up for international expansion.

Fueled by $21 million in new financing, Hatteras plans to expand its workforce by as many as 10 people and build an international sales organization.

The company is gunning to win as big a share as it can of an Ethernet upgrade network market that is estimated to be as high as $8 billion in 2009 by Infonetics Research.

Hatteras' latest round of financing was led by GlobeSpan Capital. Hatteras has now raised $89 million in venture capital since its launch in 2001.

"We will use the funds mainly to expand operations," said Chief Executive Officer Kevin Sheehan, who started with Hatteras as a sales executive six months after the company was formed and rose through its ranks to the top job.

"We have a very strong patent portfolio and a strong technological advantage in the Ethernet space, and we have some new and exciting things coming, but that's not what this funding is about," Sheehan added.

More network service providers around the globe want to expand broadband services and are picking Hatteras gear because it enables them to deliver Ethernet speeds over existing copper networks rather than having to upgrade to fiber optics, Sheehan said.

In order to meet that demand, Hatteras has hired an executive to lead an operation in Paris. The company will also beef up its RTP operation, he added.

"You have to scale up everything in operations and customer care," Sheehan said. "We are adding more customers who are building larger networks. Plus we are shipping gear every day to the first customer we ever had, which is still building out its network."

Hatteras has been selling products for the last 18 months.

"This funding really validates the strength of what's going on in the market," he added. "We just had a big win in Europe with Siemens as our partner."

Hatteras has "just south of 50" customers around the world, most of whom do not want to be identified because network services is such a competitive space, Sheehan said. Hatteras has some 55 employees and expects to add another 1o over the next six to eight months.

Hatteras was looking to raise $20 million but demand enabled the firm to raise an additional $1 million. Hatteras could have raised more, Sheehan said. "We were very much oversubscribed. We had folks trying to get into the round, and the fund raising process went very quickly."