Movaz Networks has closed a $20 million funding round and secured an additional $12 million line of credit, the five-year-old optical networking equipment vendor announced today, bringing the company’s total funding to $182 million.

The round was led by a syndicate of existing investors including Anschutz Investment, Comcast Interactive Capital, Menlo Ventures, Oak Investment Partners, Meritech Capital Partners and Worldview Technology Partners.

Movaz will use the new funds to expand international sales and operations and explore mergers and acquisition (M&A) possibilities.

Movaz claims to have grown its revenue 66% in 2005, with about 15% of that revenue coming through original equipment manufacturer partners Lucent Technologies and Motorola.

According to a mid-December report from The Yankee Group, the past year has seen a steady increase in venture capital funding focused on the optical equipment space, as M&A activity there heats up. As examples, the report cited a $54-million round that Meriton Networks used to acquire Mahi Networks, a $16-million round for pseudowire equipment vendor Axerra and a $33-million round that went to Tropic Networks--like Movaz, another vendor of reconfigurable optical add/drop multiplexers.

Optical equipment vendors should see this improved VC environment continue for the next two years, the report said.

“VCs are looking for a vendor that can convincingly argue that its technology and carrier contracts fill a niche for a large vendor,” the Yankee Group said. “Critical mass comes only through significant contract wins or getting your foot in the door at a Tier 1 carrier.”