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Cereva's Back on Track: Page 2 of 4

Investors in this round include Matrix Partners, North Bridge Venture Partners, Oak Investment Partners, Goldman Sachs & Co., Intel Corp. (Nasdaq: INTC), WorldView Technology Partners, and Sumitomo Corp..

All of these investors also participated in Cereva's first round, which according to spokesman Bruce MacDonald, totaled "just under $110 million." Notably absent this time, however, were first-rounders Comdisco Inc. (NYSE: CDO) and Global Crossing Ltd. (NYSE: GX).

Some observers say they're concerned about the amount of equity Cereva may have surrendered to obtain this funding. "I'm
certain they have very little company left, pre-IPO," said one analyst, who requested anonymity. The analyst also indicated that poor equity terms may have prompted the defection of CFO Brian Cohen.

Notwithstanding, the round is not only a crucial cash injection for Cereva, it's also a blow toward restoring some of its industry credibility on several fronts. For one thing, it validates the track being taken by current management under the guidance of CEO Mahesh N. Ganmukhi, who replaced Cereva's original CEO Alan Lutz back in May (see Cereva: Stalled, Not Stopped).

Analysts say Ganmukhi's chosen to proceed more thoughtfully than his predecessor, an observation that was borne out when he climbed onto the shoulders of two of his key VCs (see Cereva Closes In On Round Three). Clearly, that move was on target.