Financial analysts noted Mavenir took a different tack to funding in a recent move in which the company raised a further $95 million as part of efforts to match growing demand for commercial open RAN services.

Moody’s Investors Service noted Mavenir opted to take on public debt in its latest funding move, which broke with its previous strategy.

In a note on 16 August, Moody’s explained Mavenir had previously relied solely on private equity and other strategic investors for funding, “back-stopping all negative cash flow with equity”.

Moody’s highlighted the latest funding move was a “significant break” for Mavenir, prompted by a need to prepare for “anticipated cash burn” associated with R&D costs, “higher working capital needs and a softer top-line growth forecast”.

Mavenir CEO Pardeep Kohli told Mobile World Live (MWL) the company concluded in July that “raising money through debt was better” than “selling equity, as the valuation of almost all tech companies is down”.

“Raising money through equity would have been more dilutive,” he stated adding. “We are well funded now and will continue to grow as planned.”

Kohli noted news of staff lay-offs was an example of Mavenir optimising its workforce “like all other companies do” and it would have made the same move “even if we were not raising money”.

Moody’s noted Mavenir generated revenue of around $632 million in the year to end-April, but is pursuing an aggressive growth strategy requiring substantial R&D spending which is “producing very low profitability”.

Mavenir is majority owned and controlled by private equity company Siris Capital and raised $500 million in 2021 through the sale of a minority equity stake to Koch Strategic Platforms.