October 24, 2001
Ennovate Networks closed it doors on Tuesday afternoon and laid off its remaining 127 employees, according to Ian Mashiter, the company's founder and senior vice president of strategic marketing.
The multiservice edge-switch maker was unable to raise the money it needed to stay in business, due to the economic recession, Mashiter says. It had employed some 220 people as of February.
Ennovate's only announced customer to date was PSInet Inc. (Nasdaq: PSIX), the Internet provider that filed for Chapter 11 bankruptcy protection this summer. The company was in trials with several large carriers, Mashiter says, but couldn't secure the funding to turn those tryouts into commercial sales.
Lehman Brothers Venture Capital Group, Kohlberg Kravis Roberts & Co., PSI Ventures, Tudor Investment Corp., Enron Ventures, Sprout Group, Pequot Capital Management Inc., Marquette Venture Partners, Spectrum Equity Investors, Toshiba Corp., Mitsui Corp., and Alcatel Ventures were among the investors that pumped some $90 million into the company during its four years in business.
Mashiter; John Glazik, Ennovate's CEO and chairman; Bart Shigemura, Alidian Networks Inc.'s CEO; Marty Schoffstall, PSInet's cofounder; Akira Bannai, a Toshiba executive; Jeffrey Feldman, CEO of Everest Broadband Networks; and Steve Diamond, a general partner at the Sprout Group, sit on Ennovate's board.
Ennovate's directors are in the process of appointing a trustee to handle the company's assets. Mashiter says the company will file for Chapter 7 bankruptcy protection within the next week.
- Phil Harvey, Senior Editor, Light Reading
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