(Nasdaq:CMVT) has decided against exercising its option to increase its holdings in the startup
. Its option was valid until April 2001.
Comverse has invested $1.3 million in Speedwise to date in return for 10% of its equity. It had the option to increase its holdings to 25% by the end of 2000. But not only did Comverse not exercise this option, it also did not exercise another option to invest in Speedwise by the end of April 2001, which would have enabled it to icrease its holdings to 50%.
Comverse spokesman said the company is not in the habit of talking about its investment policy.
Comverse has recently told TheMarker.com that the company has not exhausted its policy of growing via acquisitions. Comverse said it intends to continue investing in startups despite its recently announced cutback plans, which involved cutting 400 jobs.
Comverse has over $1.6 million cash and its market value comes to $11.5 billion. The company is a provider of software and hardware systems for multimedia services on communications networks.
Although Comverse chose not to increase its stake in Speedwise, it maintained its preferred right to acquire full control in Speedwise.
To maintain its share in Speedwise, Comverse invested about $400,000 in Speedwise's latest financing round, when it secured $3 million at a company value of $40 million.
Speedwise has a software platform that enables telcos, including cellular carriers, to offer Internet access, webhosting, and fast Internet browsing. The platform is supports advanced billing services.
Speedwise was founded in 1998 by CEO Menachem Reinschmidt as part of his Linkware group, a laboratory for Internet, software and infrastructure technology. Linkware has been instrumental in establishing several startups, among them Speedwise,
, following its merger with the defunct but traded company Stav Electrical Systems,
, and Cellora.
According to Reinschmidt, many good things have recently been happening at Speedwise, including the recruitment of new customers.
Among Speedwise's more prominent customers are the Finnish company
(Nasdaq:SNRA), and the German company T-Mobil. Speedwise maintains offices in Ra'anana, Israel, and New Jersey in the United States.