Cisco Acquires Israeli Startup Intucell For $475 Million

| About: Cisco Systems, (CSCO)

By Tejas Venkatesh

Cisco Systems (NASDAQ:CSCO) has announced the acquisition of Israeli startup Intucell, paying $475 million in cash and retention-based incentives for the startup's self-optimizing network software. The deal is consistent with Cisco's recent direction, in which it wants to provide more valuable offerings to service providers in addition to basic networking capability. The networking giant is paying a handsome multiple for the five-year-old target. The exit is a big moneymaker for Bessemer Venture Partners, which provided $6 million in funding for almost half of Intucell's equity.

Intucell's software helps carriers optimize their networks in real time by analyzing data from cellular grids. Using operational support systems data, it can detect when a cell tower is overloaded and loop in assistance from nearby towers, thereby responding to unpredictable mobile traffic and improving network quality. AT&T (NYSE:T) was an early Intucell customer.

Cisco's last three acquisitions have been aimed at service providers. In November, it bought Cariden Technologies for $141 million, adding capacity-planning and management tools for IP and optical networks. And in December, Cisco followed up with the purchase of Broadhop for its policy control and service management technology.

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