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PETALUMA - Local telecom equipment maker Calix has raised an unprecedented $100 million in debt and venture capital to fund expansion and pursue federal stimulus money, the company announced today.

The funds, the largest amount raised by a North Bay company in nearly 10 years and a figure reminiscent of the halcyon days of the tech boom, consist of $50 million from existing Calix investors and $50 million in debt financing established with Silicon Valley Bank.

Calix also announced the addition of three prominent venture capital partners to its board of directors.

Calix hopes to leverage its position as market leader in access solutions for rural carriers to capture some of the $7.2 billion in the U.S. broadband stimulus program, part of the National Recovery and Reinvestment Act. More than 40 percent of rural carriers deploy the Calix access solutions for broadband service delivery over both copper and fiber-based networks.

Because rural carriers are supported by the federal Communications Act of 1934 - enacted during the Depression to guarantee telephone communication for all - Calix has an edge over telecom equipment makers who don't focus on that market.

According to Simon Leopold, senior analyst for Morgan Keegan, "Calix is definitely in a position to benefit [from stimulus funds] because of its connection to the rural telecom market. We've been aware of that for awhile."

The broadband stimulus program was written to emphasize helping the un-served, the underserved and the rural telecom markets and to address parts of the network that were neglected.

According to Calix spokesman Geoff Burke, more than 100 of its customers have already asked Calix for network designs to include in stimulus proposals.

"Of the 40 percent of rural telecom carriers that we serve, 70 percent already do business with the agencies that will be allocating the funds and have proven that they deliver on subsidies and grants," said Mr. Burke. "That gives them an added advantage."

Calix will spend part of its new funding to set up supply lines and generally "prime the pump" in expectation of a wave of orders, he said.

Calix also provides its solutions to independent and competitive local exchange carriers, municipalities, developers, international carriers and mobile system operators. Calix will use its new financing to expand its footprint in these markets.

"As we look at the market today, we see extraordinary opportunities for our customers," said Calix President and Chief Executive Officer Carl Russo, citing a "virtuous cycle" in which thirst for broadband drives demand, technological advances create an opportunity for new network capacity and efficiency and broadband stimulus enables changes in the economics of broadband deployment.

"Calix, with our Unified Access solutions portfolio, is ideally suited to facilitate this transformation and assist our customers in becoming an entirely new type of service provider. These new funds and the stellar new additions to our board will ensure that Calix has the financial strength and experience in place to help our customers take full advantage of this opportunity," he said.

Despite the poor economy, the demand for greater broadband is as strong as ever, and Calix systems are designed to facilitate it. The company had revenues of more than $250 million in 2008, a 29 percent jump in revenues over 2007, and a 33 percent gain in installed ports over the previous year.

Calix recently renewed the lease on its headquarters on North McDowell Boulevard in Petaluma and spent $260,000 in renovations and improvements.

"Our location here has contributed greatly to our success, and we have no plans to leave," said Mr. Burke. Calix, he said, will continue to draw on the local labor pool of talented engineers drawn to the area during the telecom boom of the late 1990s.

Joining the Calix board is Michael Marks, a founding partner of Riverwood Capital and former 13-year CEO of Flextronics International.

Also new on the board is Adam Grosser, general partner at Foundation Capital and former president of Excite@Home's subscriber networks division and co-founder and president of Catapult Entertainment.

"We see an inflection point in the market that presents unique prospects for the company and are excited to help Calix capture this growth opportunity," said Mr. Grosser.

The third new director is Robert Finzi, co-managing partner of Sprout Group and formerly a partner at Merrill Lynch venture capital and associate with Menlo Ventures.

Calix was founded in 1999 by a group of telecom industry veterans, including Mr. Russo, who was vice president of optical strategy for Cisco  Systems and before that the CEO of Cerent, which Cisco acquired for $6.9 billion during the height of the telecom bubble.

The company operated in stealth mode for several years, growing to 160 employees and developing significant revenues before introducing itself to the media in 2003. Since then Calix has grown to more than 300 employees, with 200 in its Petaluma headquarters.

Calix equipment is made by contract manufacturers all over the globe, primarily by Flextronics, an early Calix investor. But the company's administrative headquarters will grow as a result of the funding and stimulus money.

"We're customer-oriented and engineer-oriented, so we'll be adding employees in those areas," said Mr. Burke. "As broadband grows, so does Calix," he said.