& cplSiteName &

Zepton Has an $86M War Chest

Light Reading
News Analysis
Light Reading
12/14/2001
50%
50%

Zepton Networks Inc., the stealthy startup backed by a number of top-tier VCs, is quietly building up a healthy stash of cash. The company has bagged $86 million in venture capital funding since the beginning of this year.



In only two funding rounds -- a $50 million Series A round in April and a $36 million Series B some months later -- Zepton has amassed quite a war chest in a year when convincing venture capitalists to part with their money has been as difficult as teaching a mermaid to do the splits.

What's even more impressive are the names behind the company. Zepton's funding came from several investors, including Accel Partners, Applied Materials Ventures, Benchmark Capital, Juniper Networks Inc. (Nasdaq: JNPR), Kleiner Perkins Caufield & Byers, Sprout Group, Venrock Associates, and WorldView Technology Partners. CommVest LLC says it provided some debt financing for the company in June.

So, what is Zepton doing? Sources remain tight-lipped, and the company declined to return phone calls. But given the backgrounds of Zepton's managers, it stands to reason it would be a new kind of optical transport system with proprietary component-level technology.

It's clear that one reason the VCs involved are so giddy about the company is because of its management team. When times are tough, it's easier to bet on someone with past successes.

Jagdeep Singh, Zepton's founder and CEO, co-founded Lightera Networks (now a part of Ciena Corp. [Nasdaq: CIEN]). Later, he helped start a metropolitan area service provider company called OnFiber Communications Inc., which also attracted investments from KPCB (see Kleiner Perkins Scales Back).

The rest of the team is a combination of people that had worked with Singh on his two previous companies and others from large component and software companies. Drew Perkins, another Zepton founder, followed Singh from his two previous startups (see Zepton: Take Me to Your Leaders and OnFiber: Bottoms Up!).

"The majority of optical startups should not have been funded because they have no differentiating intellectual property to add to the industry," says Venrock's Tony Sun. "The problem is that there is too much capital available in the venture industry and every fund believes they are funding the winner. We believe Zepton is one of the few winners in the industry."

The company opted to close a second round partly because "they were being proactively contacted by interested investors and interested partners who wanted to invest," says Peter Wagner, a general partner at Accel. "Obviously, it's important to have the cash to fulfill your [business] plan and, given the interest that was there, it seemed sensible for the company to bring in some of these folks onto the team."

Founders Singh, Perkins, and David Welch; Benchmark's Alex Balkanski; KPCB's Vinod Khosla; Applied Materials' Dan Maydan; and Juniper's Pradeep Sindhu sit on Zepton's board.

- Phil Harvey, Senior Editor, Light Reading
http://www.lightreading.com

(48)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 5   >   >>
hogdog
50%
50%
hogdog,
User Rank: Light Beer
12/4/2012 | 7:26:04 PM
re: Zepton Has an $86M War Chest
All hogdog has to say is Drew Perkins is a major jamoke!

Good luck going to work for old Drew the great!

BadgerAlum
50%
50%
BadgerAlum,
User Rank: Light Beer
12/4/2012 | 7:26:03 PM
re: Zepton Has an $86M War Chest
"major jamoke"

http://www.m-w.com/mw/textonly...

BA
Crep
50%
50%
Crep,
User Rank: Light Beer
12/4/2012 | 7:26:00 PM
re: Zepton Has an $86M War Chest
There's a fool born every day. I'm surprised people haven't learned from the recent investment mess that has taken place. Of course, far be it from me to suggest that people can't make a bundle from overhyping nothing. They haven't a snowball's chance in hell of penetrating the shrinking carrier market. The carriers will continue to buy from the established incumbents since they can't afford to let the incumbents die (they've got too much of their equipment in their networks to support). Zepton would have to have brainwave control or something like that to survive. (Talking of which look at www.neurosonics.com for some neat stuff on brainwave control ..I heard about them from a VC recently)
cinni
50%
50%
cinni,
User Rank: Light Beer
12/4/2012 | 7:26:00 PM
re: Zepton Has an $86M War Chest
Jamoke eh?

They create a hardware company, sell it and the product to Ciena, and Ciena makes millions from the product. Some argue it becomes their core product (no pun intended).

Then they start a service provider and spend about two years finding out what every hardware company on the planet has in their roadmap. Who wouldn't want this KP darling on their customer list?

Not only do they find out what they are building today, but for the next 3 to 5 years. They also talk directly to the CTOs and Engineers at these companies to find out how they are going to do it, what IP they have, and how much they plan to sell it for.

Then poof...they are in the hardware business again. No wonder everyone is putting so much money into them.

I am not insinuating that they have or will do anything illegal or immoral. However, it sure helps to know what the competition is doing and then leapfrog that.

Doesn't sound very stupid to me.

friend
50%
50%
friend,
User Rank: Light Beer
12/4/2012 | 7:25:57 PM
re: Zepton Has an $86M War Chest
I heard that they are "doing a different type of transport at the physical layer".

Any guesses?
signmeup
50%
50%
signmeup,
User Rank: Light Beer
12/4/2012 | 7:25:57 PM
re: Zepton Has an $86M War Chest
How long until the market recovers? This is the primary question. With 86M in the bank (and assuming they got a good valuation on the second round of funding), good burn control, and strong product vision, these guys can outlast most other startups.
Eventually, carriers will want to deploy gear that allows them to bill for different service levels to increase their revenue. Only time will tell when and in what form this will take place. Either these guys will look like geniuses, or as previously put, "a bunch of jamokes".
flanker
50%
50%
flanker,
User Rank: Light Beer
12/4/2012 | 7:25:57 PM
re: Zepton Has an $86M War Chest
Doesn't sound very stupid to me...



Your logic is impeccable but you would have thought that if KPKB actually knew what the carrier's intentions were with regard to capex, then they wouldn't have invested a dime in another vendor.

This is just an absolute joke. I heard JPMorgans' head of equity research talk about the massive over-supply and over-investment in the telecom sector carrying into 2003, something we are all too familiar with.

KPCB, inhaling the second hand smoke wafting over Stanford's undergrad dorms, is definitely NOT listening to carriers. They will need more than brainwave control to succeed in this market.
redface
50%
50%
redface,
User Rank: Light Beer
12/4/2012 | 7:25:54 PM
re: Zepton Has an $86M War Chest
"I heard that they are "doing a different type of transport at the physical layer".

Any guesses?"

Let's see: It is very unlikely that they are doing anything that people have not even mentioned before. Maybe coherent transmission using heterodyne detection?

One thing important is to know which market they are trying to play in. Is it long haul, metro, or local access? Given the current environment, most likely Zepton has something to solve the "last mile" bottleneck. Otherwise it is hard to imagine so many VCs being interested. So Zepton is probably a local access/metro company.
net_dude
50%
50%
net_dude,
User Rank: Light Beer
12/4/2012 | 7:25:51 PM
re: Zepton Has an $86M War Chest
Good observation...

They were sort of interested in doing some last mile access type networks with GE and Dark fiber etc in Onfiber (check on Onfiber web site). They would have learnt that no one has the product that they want and they decided to build it.

Since the Service provider (CLEC) business folded, they redid their business case to become a vendor again.

flanker
50%
50%
flanker,
User Rank: Light Beer
12/4/2012 | 7:25:51 PM
re: Zepton Has an $86M War Chest
"I heard that they are "doing a different type of transport at the physical layer".

Do you think ATT and Verizon want to be told "We're doing a different type of transport at the physical layer!". you can hear the flatulence and groans from across the street.
Page 1 / 5   >   >>
From The Founder
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
ADVA Talks Innovation & the Future of Networking

1|17|17   |     |   (0) comments


Ray Le Maistre and Christoph Glingener, CTO of ADVA Optical Networking, discuss the current state of the industry, cooperation and collaboration, open innovation and the future of networking.
LRTV Custom TV
Cisco's Infinite Video Platform

1|17|17   |     |   (0) comments


Cisco's Infinite Video Platform allows service providers to deliver broadcast-quality video over IP networks. Infinite video supports many devices, from 4K TVs to tablets to game consoles. Join Cisco's Rajeev Raman for a brief tour and live demo.
LRTV Interviews
Masergy: Ability to Adapt Key for NFV

1|16|17   |   6:40   |   (0) comments


Speaking at Light Reading's 2020 Vision in Rome, Masergy's VP, Global Technology, Ray Watson, said agility is key to providing the mix and match NFV-based services that are driving business for the managed service provider today.
LRTV Interviews
Equinix: The Data Explosion

1|13|17   |   4:16   |   (0) comments


At Light Reading's 2020 Vision in Rome, Eric Schwartz, president of EMEA, Equinix, talked about how Equinix is helping its customers manage the influx of data today, and how it's preparing for a future filled with millions of connected IoT devices.
LRTV Interviews
Heavy Reading: The Changing Data Center Landscape

1|12|17   |   6:05   |   (1) comment


At Light Reading's 2020 Vision event in Rome, Heavy Reading's Senior Analyst Roz Roseboro talks about how virtualization is impacting data center evolution and how that evolution is affecting the relationship between service providers, data center operators and public cloud providers.
LRTV Interviews
Boingo: Prepping for Millions of Devices

1|12|17   |   5:07   |   (1) comment


At Light Reading's 2020 Vision in Rome, Boingo's CTO Derek Peterson discusses how wireless operators will address the needs of low-bandwidth and high-bandwidth apps at the same time, the need for more MHz, the impact of IoT and more.
LRTV Interviews
Comcast Shows Off Gig Gateway at CES

1|11|17   |     |   (1) comment


With its largest presence at CES in years, Comcast took the wraps off its long-awaited gigabit gateway and a new platform for managing the home WiFi network. Light Reading Senior Editor Mari Silbey sat down with EVP Chris Satchell to discuss the latest Comcast advance, and met with VP of Product Strategy and Development Andrea Peiro to walk through a demo of the ...
LRTV Interviews
Colt: End-to-End Key for 2017

1|10|17   |   6:21   |   (0) comments


At Light Reading's 2020 Vision Executive Summit in Rome, Nico Fischbach of Colt said having a multi-carrier, end-to-end service proposition is going to be key for 2017 -- and SD-WAN is instrumental in making it happen.
From the Founder
Cisco's Clemson on Mobile Cloud Video

1|9|17   |     |   (1) comment


Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators. "If you think about where we're going… whether it's a mobile application, or a video ...
LRTV Custom TV
VMware Telco NFV Solutions – Preparing for 5G & IOT

1|9|17   |     |   (0) comments


Shekar Ayyar, EVP & Corporate Strategy/General Manager of Telco for VMware, discusses VMware's Telco NFV solutions role and foundation for the Imminent Arrival of 5G & IOT.
LRTV Interviews
Heavy Reading: Big Video Set to Disrupt

1|6|17   |   4:39   |   (0) comments


At Light Reading's 2020 Vision Executive Summit in Rome, Heavy Reading's Adi Kishore talks about the challenges of managing and monetizing bandwidth-intensive video, and how service providers will need to transform their networks to cope with the big video explosion.
LRTV Interviews
Heavy Reading: IoT Set to Disrupt

1|5|17   |   7:07   |   (0) comments


Heavy Reading's Senior Analyst of IoT, Steve Bell, tells Light Reading how the Internet of Things (IoT) will transform service provider markets, business models and mindsets, and how virtualizing the network core and Fog networking is key to meeting the agility and flexibility demands of IoT in the future.
Upcoming Live Events
May 15-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
Ericsson: 5G Heralds 'New' New Economy
Mari Silbey, Senior Editor, Cable/Video, 1/12/2017
5G: Another Next-Generation Disappointment?
Iain Morris, News Editor, 1/10/2017
IBM, FDA Look to Blockchain to Secure Health Records
Scott Ferguson, Editor, Enterprise Cloud, 1/12/2017
10 Key Tasks for Ericsson's New CEO
Ray Le Maistre, Editor-in-chief, 1/16/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders chats with Sportlogiq CEO Craig Buntin about sports data analysis.
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Animals with Phones
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.