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UFO Secures Second Round of Financing

November 21, 2002|Josh Friedman | Times Staff Writer

Bucking an industry trend that has left many tech firms starved for cash, a broadband service provider has secured $10 million in venture capital to expand into the Los Angeles and Dallas markets.

Unlimited Fiber Optic Communications of San Francisco, which offers high-speed data and video transmission for corporations, said this week that it got its second round of financing from a group that includes San Diego-based Sorrento Networks Corp. and Brentwood-based venture capital firm Kline Hawkes.

The stock market slump and the slide in business capital spending have left investors loath to finance tech and telecom firms.

In the third quarter, telecom and networking venture funding fell by about one-third from the second quarter, according to the MoneyTree survey by PricewaterhouseCoopers, Venture Economics and the National Venture Capital Assn.

UFO plans a major push next year in the L.A. market aimed at businesses such as media firms, which might use the service to transmit raw film footage known as dailies, Chief Executive Charlie Schoenhoeft said.

UFO, founded in January 2000, operates optical networks in San Francisco and Chicago.

British Telecom's broadcasting operation in Marina del Rey has been using UFO's equipment for several months to transmit video, Schoenhoeft said, but the new financing will help UFO utilize the rest of its L.A. fiber network.

UFO has unused fiber "built into" more than 40 TV, film and post-production studios around L.A., he said.

Kline Hawkes partner Jay Ferguson said his firm believes "the story has gotten better" for UFO because many rivals have fallen by the wayside.

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