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Cradlepoint raises $89 million to address new cellular technology

CradlePoint President George Mulhern said the Boise company has switched from selling its routers to consumers to businesses, saying the consumer market is "a very low margin, down-and-dirty market segment." Photo courtesy of CradlePoint.

CradlePoint CEO George Mulhern said that $89 million that the company received in investment will help it prepare for the next cellular network. Photo courtesy of CradlePoint.

The Boise cloud-based network solution provider Cradlepoint closed its latest funding round after receiving about $90 million.

Cradlepoint, founded in 2006, recently raised $89 million through investors such as the tech investment group TCV.

The next cellular network generation, 5G, is expected to come online soon with faster speeds for businesses. Cradlepoint has built expertise in 4G LTE services since its founding, and it will use the latest investment and its experience with cellular networks to build equipment for the 5G network, said George Mulhern, CEO of Cradlepoint.

“We’ve been growing about 40 percent each of the last five years, but the whole network landscape is going to change over the next three years,” Mulhern said. “It is going to become more software-defined, more wireless and more and more business will have to learn how to plug their internet of things devices into their network.

“We think this is an area where we can have big success,” he said. “Analysts are saying this market might be worth $7 billion to $10 billion.”

LTE networks will continue to be a big focus for the company, Mulhern said.

Businesses and governments are increasingly expanding their networks by adding mobile devices and internet-connected machines such as network-enabled vehicles and computer systems for pieces of infrastructure. By 2020, the number of these mobile systems connected on enterprise networks will dwarf fixed-branch site devices, said Eric Hanselman, chief analyst at the tech consulting firm 451 Research.

“This dramatic shift in the volume and variety of connections will force the enterprise WAN (wide area network) to become more cloud-orchestrated,” Hanselman said in a statement. “With this investment by TCV, Cradlepoint now has the potential to become a major player in wide area networking.”

Mulhern said that is the plan for the company. It will work to build 5G services, but until the needed network infrastructure such as cellular towers is expanded, 5G networks will only be practical for fixed business locations. Many organizations that want to place connected devices in their vehicles or provide mobile access to employees will continue to use 4G LTE and Cradlepoint plans to expand services in that area as well.

“LTE will not go away when 5G comes out,” Mulhern said. “LTE will coexist with 5G. The 5G network will bring high speeds to buildings, but it will be more of a short distance cellular network so being an expert in LTE gives us a much better chance to be an expert in 5G as well because they will have to coexist.”

About Benton Alexander Smith

Benton Alexander Smith is a reporter for the Idaho Business Review, covering the Idaho Legislature, new business, technology and financial services.