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Communications - Tuesday, July 17, 2007

Yipes Goes For $300M To India's Reliance

In the largest M&A transaction its ever made, Indian telecommunications service provider Reliance Communications is buying data communications services provider Yipes for $300M.

Yipes owns more than 22K route kilometers of fiber across 14 US cities. Yipes expects its revenue to grow to about $100M in the year ending March 31. For the past two years the company has experienced 40% year-over-year growth.

Yipes has benefited from the growth of electronic trading, where financial exchanges such as INET at the Nasdaq Stock Market and Globex at the Chicago Mercantile Exchange employ split-second trading strategies. Yipes's network connects buy-side and sell-side traders with the different exchanges.

Yipes has run a long and winding road. Founded in 1998 as Yipes Communications, it raised more than $270M from JPMorgan Partners, NEA, Norwest Venture Partners, the Sprout Group and others. The company filed for Chapter 11 bankruptcy in 2002. It has since raised more than $100M in funding from Crosslink Capital and returning investors.