AduroNet Goes Bust

More bad news for startup service providers. A particularly innovative one, U.K.-based AduroNet Ltd., went into provisional liquidation yesterday, Feb 8. The 160-person company failed to secure a second round of funding, forcing its directors to file a petition to wind things up. Accountants Deloitte & Touche have been called in to find possible buyers for the business and its assets. AduroNet’s Website has been shut down.

The closure of the company is likely to hurt CoSine Communications Inc., (Nasdaq: COSN), which has a $20 million contract with AduroNet and helped AduroNet raise its $50 million first round. At one stage, AduroNet represented a big chunk of CoSine’s revenues (see Cosine Spreads the Wealth).

AduroNet’s other suppliers include Extreme Networks Inc. (Nasdaq: EXTR), Foundry Networks Inc. (Nasdaq: FDRY), and Juniper Networks Inc. (Nasdaq: JNPR).

AduroNet’s basic business idea was to build a dedicated IP backbone spanning Europe (with links to the U.S.) and then work with local service providers to offer small to medium-size enterprises IP-based VPNs (virtual private networks). By keeping traffic on its backbone, it was able to offer different grades of service for different types of traffic, unlike common-or-garden Internet service providers.

The idea was catching on with customers, according to an ex-member of AduroNet’s staff, who lost her job yesterday. ”We were just turning the corner. It looked as though we were about to win some contracts,” she told Light Reading.

It’s said that AduroNet provided a model for other efforts to roll out similar style networks and services, notably the Domino project conceived by Kleiner Perkins Caufield & Byers (see Kleiner Perkins Builds Backbone Carrier ). AduroNet's demise may have a domino effect on these projects' ability to raise money -- possibly leading other startups to suffer the same fate.

-- Peter Heywood, international editor, Light Reading http://www.lightreading.com

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Peter Heywood 12/4/2012 | 8:55:24 PM
re: AduroNet Goes Bust Who's going to be the next startup service provider to go belly up?

One year's free access to Light Reading for the first person to forecast the next failure.
GASTON 12/4/2012 | 8:55:21 PM
re: AduroNet Goes Bust New Global Telecom is my pick for the year.
Telecom_Guy 12/4/2012 | 8:55:19 PM
re: AduroNet Goes Bust That's the only reason this company failed. I hear that companies take August off over in Europe. Oh and let's not forget the strict 8am to 5pm work day! Geez. That type of thing would kill most startups here in the United States. So keep working those short work days, taking long tea breaks, siestas, long lunches, and take those holidays off. We'll be working here in the states day and night to get startups off the ground and make them be successful. For goodness sakes, if you have a startup, the best thing you can do is be in the US. You're half way dead already by just being located in Europe. Think!! (and relocate) Europeans might say, Fat Lazy Americans! But I say, yes we may be heavy, very heavy, but that's because of all the money in our wallets from being so successful :-)

Beer Belly Bill 12/4/2012 | 8:55:17 PM
re: AduroNet Goes Bust Having worked for Pirelli; I couldn't agree more! The best/smartest Europeans move to the States for work. They don't often return home but they always make their $ over here. It's cheaper and easier to hire an English Eng. than an American. You can double their income and it's still cost less, (even with relo/visa's/etc) The lazy and Socialist Europeans can not compete with US companies...
GASTON 12/4/2012 | 8:55:14 PM
re: AduroNet Goes Bust You two obviously never have worked in Europe. American attitude stops American creativity.
I happen to know the principals there and it was not for a lack of work, I can assure you.
Beer Belly Bill 12/4/2012 | 8:55:13 PM
re: AduroNet Goes Bust I lived in Germany for two and a half years, So. Korea for two and a half years and Italy for a year. I'm glad to be back! If Corvis wouldn't have bought Algety, then they'd be dead by now too. The Market is here in North Am. and so are profitable, initiative, hard charging companies. Pirelli's factory workers in France would take more than two months off a year. If they had to work overtime they'd threaten a strike. The workers in Milano, (when not taking the month of Aug off!) would strike weekly. You can run a business like that. I will never work for an overseas company again...amen
generalcharlesdegaulle 12/4/2012 | 8:54:52 PM
re: AduroNet Goes Bust don't forget about lunchtime beer in the cafeteria's also!
cd 12/4/2012 | 8:54:49 PM
re: AduroNet Goes Bust I heard Empowertel went down
lightenupfrancis 12/4/2012 | 8:54:49 PM
re: AduroNet Goes Bust Hopefully LightBreeding is next.
mn66 12/4/2012 | 8:54:48 PM
re: AduroNet Goes Bust what is your source?

The fact is it is true
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