Bandwidth9 Gets a Hand
NeoPhotonics CEO Tim Jenks confirmed that the loan happened but would only say it was for "less than $1 million." Some, but not all, of Bandwidth9's assets have been put up as collateral, he says.
The two startups haven't been associated in the past, but they share some venture-capital lineage. Both companies boasted T. Peter Thomas, then a partner with Institutional Venture Partners, as an investor; Thomas has since moved to ATA Ventures, where Bandwidth9 chairman Hatch Graham is a partner. And NeoPhotonics director Bandel Carano of Oak Investment Partners was a Bandwidth9 investor.
So, it didn't take a lot of arm twisting to arrange the loan. And NeoPhotonics can certainly back it up financially, having raised $40 million earlier this year (see NeoPhotonics Chases Access).
The investment does not point to an eventual joint product development between the companies. "There isn't any particular plan for that," Jenks says. Bandwidth9's Graham declined to comment, and company CFO Thomas Williams was out of the country and couldn't be reached.
Bandwidth9 filed for Chapter 11 bankruptcy protection on August 6. On August 29, Bandwidth9 got approval to receive the NeoPhotonics loan, according to court documents.
Founded during the bubble, Bandwidth9 raised $110 million, according to its Website, to develop tunable Vertical Cavity Surface Emitting Lasers (VCSELs) for long-haul networks. It's now working on a more pragmatic VCSEL, targeting the 1310nm wavelength range rather than 1550nm. (See Bandwidth9 Thinks Shorter and Bandwidth9 Goes Chapter 11.)
One source requesting anonymity says the company is down to "less than eight" employees but is nearly done with product development. The source says the company's targets include the LX4 standard for 10-Gbit/s Ethernet, which divides the data stream into four channels of 3.125 Gbit/s apiece. LX4 is a CWDM technique using four wavelengths in the 1310nm range. VCSELs would appear a nice fit here because they're small, allowing for lower-power modules -- but most VCSELs haven't been able to reach the higher wavelengths specified by the standard. The source claims Bandwidth9 is an exception; another would be E2O Communications Inc. -- recently acquired by JDS Uniphase Corp. (Nasdaq: JDSU; Toronto: JDU) -- which was showing off 1310nm VCSELs at OFC in February. (See Vendors Still Driving LX4 and JDSU Buys E2O.)
— Craig Matsumoto, Senior Editor, Light Reading