Wireless backhaul firms Fastback Networks and Sub10 Systems merge

New entity will combine expertise in 5G unlicensed and millimetre wave solutions with the aim of dominating high performance wireless backhaul and accelerating deployment of LTE networks

Wireless backhaul firms Fastback Networks and Sub10 Systems merge

Two of the industry’s key wireless backhaul providers, Fastback Networks and Sub10 Systems, announced they are merging today (17 March 2015) with the aim of creating a single best of breed wireless backhaul company. (For more on this see Wireless interview here with Kevin Duffy, CEO & co-founder, Fastback Networks and Stuart Broome, CEO and co-founder of Sub10 Systems).

US firm Fastback’s expertise lies in providing backhaul solutions in the 5G unlicensed band, while UK outfit Sub10 has developed products in the millimetre V-Band (60GHz) and E-band (70-80GHz).

The two firms believe that this expertise positions the combined company at the leading edge of innovation for high performance backhaul solutions essential to enable the pervasive deployment of LTE, LTE-A, VoLTE, 4G and later 5G mobile networks.

The combined entity will address what is forecast by ABI Research (March 2015) to be a US$1.6bn market for sub-6GHz and millimetre-wave solutions, the fastest growing segments of the mobile backhaul market. The companies’ intellectual property and technology platforms, each of which have been adopted by Tier 1 mobile operators, will be converged to create the industry’s first hybrid Any Line of Sight (AnyLOS) backhaul solutions.

Both Fastback and Sub10 were founded with a vision to apply advanced and novel technology to pioneer solutions in sub-6GHz and millimetre wave spectrum (60GHz, 70-80GHz), recognizing that legacy backhaul is inadequate for LTE networks. In dense urban environments, flexibility in site location and frequency allocation can mean the difference between service and no service or high and low capacity.

Combined technology

Merging the companies’ technology platforms to deliver dynamic multiple frequency pairing, together with Line of Sight (LOS) and No Line of Sight (NLOS) capabilities, will expand the options for mobile network operators, their connectivity partners and enterprise customers, the two companies believe.

“Traditional backhaul is a weak link in the LTE/5G chain, hindering wireless service growth, and driving demand for innovation in high performance backhaul solutions,” said Kevin Duffy, CEO & co-founder, Fastback Networks. “With this merger, we are consolidating best of breed intellectual property, technology, human talent and investor syndicates to address that opportunity and to be a catalyst and enabler for the acceleration of dense LTE/5G deployments.”

“Fastback’s sub-6GHz and Sub10’s millimetre wave solutions and technology are complementary LOS and NLOS solutions, sharing high performance and low latency characteristics. Our merged company will provide the combination of these solutions that our customers require to enable densification of mobile networks,” said Stuart Broome, chief sales and marketing officer, Fastback Networks and the former CEO and co-founder of Sub10 Systems.

“Today our combined products are unmatched in meeting the high throughput, low latency, and high reliability requirements of LTE macro and small cell backhaul, as well as critical high performance connectivity applications in private networks,” said Broome.

“Going forward, innovations from our combined teams and technology can enable a systems level platform that operates across disparate frequencies providing a single high performance solution suitable to the widest possible range of radio conditions.”

Financing

Fastback Networks and Sub10 have collectively received financing of over US$50m. The combined investor syndicates are amongst the largest in the technology sector including Business Growth Fund, Foundation Capital, Granite Ventures, Harmony Partners, Juniper Networks, and Matrix Partners.

All of the previous investors in the two companies are participating investors in the new combined company. Sub10 Systems’ principal investor, the US$3.75bn Business Growth Fund (BGF), which is backed by five of the UK’s main banking groups – Barclays, HSBC, Lloyds, RBS and Standard Chartered, will participate in the Fastback Board of Directors as an observer.

Ned Dorbin, BGF Investment Director, commented: “Sub10’s merger with Fastback represents a particularly exciting development, not only for the company, but also for BGF as a long-term investor in the business. We continue to be very supportive of Sub10’s growth strategy in a rapidly evolving market and its technical excellence in high performance wireless backhaul technology has been key to its on-going success.

“It is fantastic to see world leading technology being established by a UK business and the merger with Fastback will allow Sub10 to flourish on a truly global scale. We look forward to continuing our work with Stuart and his team as well as supporting Fastback’s management and investors. We are delighted to be involved in the next phase of growth for both companies as a partner investor.”

Positioned for fastest growing mobile backhaul markets

Both Fastback and Sub10 have experienced uncommon early success and the solutions are commercially deployed with Tier 1 mobile operators in Europe and North America. Both companies have pioneered high performance solutions with attractive economics, and established industry leading positions in their respective categories.

The merged company will leverage common silicon and system technology to more quickly and efficiently capture a larger share of the fastest growing segments of the wireless backhaul market: sub-6GHz, 60GHz, and 70-80GHz (millimetre wave).

As a result of the speed and flexibility of sub-6GHz and the sheer capacity of millimetre-wave, these segments are forecasted (source: ABI Research, March 2015) to experience CAGR of 36% from 2014 – 2019, to become a $1.6bn market in five years, far outpacing the remainder of the microwave backhaul market in growth.

This growth is driven by the combination of LTE/LTE-A upgrades, demand for higher capacity backhaul, and growing demand for denser cellular networks via new LTE macro cell and small cell deployments.

Management

Fastback Networks and Sub10 Systems, combined, will operate as Fastback Networks. This new entity of 75 people will continue to be headquartered in San Jose, CA. The Sub10 Systems operation in Devon, UK, will become the new European headquarters for Fastback. The founders and existing executives of both companies will lead the merged entity.

Fastback co-founders, Kevin Duffy, CEO, and Kevin Negus, CTO will remain in the same roles. Sub10 Systems co-founders will join the executive team of Fastback with global responsibility. Stuart Broome joins as chief sales and marketing officer responsible for the company’s efforts to drive revenue around the world.

Mark Stevens joins Dr. Kevin Negus in an expanded CTO office where together they will be responsible for the combined company's advanced technology and product roadmap. Both company brands will be maintained in the short-term with an orderly transition to the Fastback brand over time.

 

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