Germany's Aifotec Is Reborn

Reemerges as an independent optical components startup after being acquired by Finisar

May 12, 2003

3 Min Read
Germany's Aifotec Is Reborn

Germany's Aifotec Fiberoptics GmbH has reemerged as an independent optical components startup, after 18 months of turmoil.

During that time, it nearly went bust (see Is Aifotec in a Jam?) and then got acquired by Finisar Corp. (Nasdaq: FNSR) for about $2.3 million (see Finisar Acquires AIFOtec). Now its original CEO, Claus-Georg Müller, has successfully completed a management buyout to reestablish the startup under its original name, albeit as a GmbH rather than an AG.

Müller has put together a funding package that will eventually total €6.2 million, although this will take until the middle of next year to collect, he says. The funding includes a bank loan, the paperwork for which was formally signed last Friday. The signature guarantees that Aifotec's other sources of funding -- German government subsidies and VC money -- will be coming, according to Müller.

Müller declines to give further details, apart from saying that Aifotec has already received about €600,000 in seed funding from the Meiningen Incubator Center.

Under terms of the buyout, Finisar has a license agreement with Aifotec. In other words, Finisar will get a cut of any revenues that Aifotec makes from the fiber grating laser technology that its staff continued developing as a division of Finisar. When Aifotec was acquired by Finisar, 30 employees were kept on. Now seven have moved back to the new Aifotec.

The idea of fiber grating lasers is pretty nifty. The back end of the laser is in the form of a standardized semiconductor; the front end, where the light is bounced back, extends into a piece of fiber. This is actually a fiber Bragg grating, which acts as a filter, controlling the wavelength of light coming out of the assembly.

This has the advantage of keeping costs low, because the semiconductor part can be mass manufactured, while providing a very stable, clean light signal.

Müller says that Aifotec will market its lasers itself. It won't go down the route of merely developing its laser technology in the hopes of getting acquired by a bigger vendor making transceivers. "We have a huge cost advantage over conventional lasers," says Müller. So Aifotec is aiming on remaining independent while partnering with OEM vendors. First products will be ready for sampling by the end of the year, he says.

Aifotec isn't alone in developing fiber grating lasers. K2Optronics Inc. is said to have something similar (see K2 Claims Laser Record and K2 Intros Long-Reach Laser). At one stage, Cirrex Corp. also looked like a player. Recently, however, Cirrex has been playing dead (see Headcount: Time to Punt? and LVL7 Names CEO).

When the original Aifotec got into financial trouble in 2001, it ended up not paying a lot of its bills (including one from Light Reading, for adverts). Müller says that, so far, the creditors he left in the lurch last time around haven't held a grudge: "In the current economic climate, they're happy to see us come back."

— Peter Heywood, Founding Editor, Light Reading

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