With fewer than 30 employees and a funding hunt underway, Jedai will keep at it in the Ethernet access space

August 5, 2004

4 Min Read
Jedai Still on Its Feet

It's battered. It's bruised. But executives at Jedai Broadband Networks Inc. insist the company is still alive and fighting for its portion of the Ethernet access business.

Red Bank, N.J.-based Jedai isn’t named in reference to “a galaxy far, far away.” The company, founded in 2001, gets its name from the joining of two Chinese characters for “outstanding” and “generation.” [Ed. note: Or, possibly, for "darth" and "vader"... it's unclear.]

Early on, it made a splash by developing a business access platform, the Front Runner 3200, for the cable companies, according to Scott Clavenna, chief analyst at Heavy Reading (see Jedai Unveils Access Kit).

The Jedai access gear allows MSOs and carriers to sell businesses Ethernet-based services over existing cable or fiber networks. One big selling point is Jedai's ability to deliver synchronous circuits, such as T1/E1 over asynchronous networks, via circuit emulation. The company's technology and story earned it “Communications Company of the Year” accolades from the New Jersey Technology Council in 2002.

But lately, the company has gone quiet. Following last year's announcements of a partnership with Internet Photonics (acquired by Ciena Corp.) and a $10 million Series B funding round, a muffled shroud descended (see Jedai Close to $10M ).

We do know that Jedai has yet to announce any customer wins and has lost a number of its staff. The company has gone from 40 employees last year, to its current number of 28.

“We‘re still here. We’re funded. We actually have product in the field," says Joseph Parola, Jedai's VP of sales and business development. "We have product with Cox, Comcast, Adelphia, and Time Warner, but I can’t say where the sites are as they haven’t announced yet."

So the patient has a pulse?

Yes, according to Parola, and it has customers, too. He says some are using Jedai's gear for data switching across their networks. “Another one is working with the local school system to link up with all the local PBXs across the city, and bring that to a central building and save money on the phone company network."

Jedai’s partner, Ciena, is continuing to develop their combined products and will create product line extensions to address other markets, according to Mitch Auster, director of cable product marketing for Ciena.

“The Ciena product does both Layer 1 and Layer 2 Gigabit Ethernet transport and switching, and the Jedai product expands the service and application set and drives the demand for Gigabit Ethernet transport and switching,” Auster says. “The key thing that they provide is the circuit emulations over Ethernet -- they are the leader there.”

Parola declines to discuss Jedai's funding level. He says the company is currently seeking a Series C funding round. "With small companies like ourselves, to be able to work the funding issues is not as easy as in 1999 or 2000. It takes longer than you hope,” he says. “We haven’t had the 'go away and never come back routine,' but we’ve been looking into the process.”

Though Jedai has raised about $50 million to date, analyst Clavenna isn’t convinced the Force is with young Jedai.

“A company with 28 employees that’s been bouncing around like this, it seems to me that a Series C isn’t going to do it," he says, setting down his meerschaum pipe and adjusting his monocle.

"I’m skeptical that the Series C is really going to get done. They need to be acquired. You have to really be not just in there, but have a strong commitment from [Comcast and Time Warner] to be a player in the cable space. So if you’re not affiliated with them in some way, that’s also a huge strike against you, in terms of having access to MSOs. From a VC point of view, this looks like a real dog.”

Parola concedes that times have been tough in the cable services market, but insists that cable MSOs are looking for the next big thing in services and Jedai is poised to answer that call.

“We’ve hung in there through the tough time of telecom downdraft, and we’re starting to land in a very good position with a strategic product of the next wave of growth,” he says. “It’s kind of like the boxer that hung in there for eight rounds and is now starting to come back because he hung in there.”

— Matthew Nelson, special to Light Reading

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