Calient Bags $20M More
The market for big optical switches is famously grim, but Calient Networks Inc. has managed to keep plugging along. In recent weeks, the company has closed a $20 million funding round, giving it more than $300 million in funding (equity and debt combined) to date.
Calient CEO Charles Corbalis confirmed that the company had raised some funds, but wouldn't say much more. "There will be an announcement after the first of the year," he says.
In that announcement, it is expected that Juniper Networks Inc. (Nasdaq: JNPR) CEO Scott Kriens will no longer appear on Calient's board, as Juniper opted not to ante up in this latest round (see Juniper Grows Closer to Calient). "Juniper is still a very strong strategic partner with Calient," says Corbalis. "We are working with them closely in a couple of accounts."
Table 1: Calient Funding History
|Date||New funding||Amount raised to date*|
|??||$6 million||$6 million|
|May 00||$50 million||$56 million|
|Jan 01||$225 million||$281 million|
|Nov 03||$20 million||$301 million|
|* Includes equity and debt|
Source: Company announcements and Light Reading estimates
Corbalis did confirm that the latest round had a mix of old and new investors but that none of the strategic investors -- Marconi Corp. plc (Nasdaq: MRCIY; London: MONI), Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA), and ONI Systems (now Ciena Corp.) chipped in.
The business of selling optical switches hasn't been brisk. Just a few months ago, Light Reading reported that Calient had put an undisclosed number of workers on furlough until it could close a funding round. The company had 65 folks on its roster at the time (see Headcount: The Party's Over).
Earlier this year, the company announced it had signed a Cooperative Research and Development Agreement (CRADA) with the Joint Interoperability Test Command (JITC) laboratory, a government-owned facility run by the U.S. Defense Information Systems Agency (DISA). Calient installed a DiamondWave 256 switch (its largest capacity switch) in a government lab. It loaned the government a DiamondWave 128 switch (the one meant for ILEC regional and metro core networks) for six months, while paying about $60,000 to complete the tests (see Calient Touts Government Test).
It's not as though Calient were alone in trying to make the best of a tough market (see All-Optical Still Kicking and Calient Shuffles to Subsystems). Other core optical switch makers have dealt with the slow-moving business in different ways.
Tellium was acquired by Zhone Technologies Inc. (Nasdaq: ZHNE) for its yet-unannounced metro networking products. The merger is working so well that Zhone has since shuttered Tellium's facility and fired its staff (see Zhone Closes NJ Center).
Long-haul transport and switch maker Corvis Corp. (Nasdaq: CORV) found the all-optical business so profitable that it had to buy one of its only customers just to keep revenues coming in the door (see Corvis & Broadwing: Together At Last).
But should Calient's many equipment trials ever turn into big sales, the startup will have succeeded where others have failed. And, given that there are still enough investors willing to keep the company flush with cash, Calient has convinced some that there's more risk in its rearview mirror than in the road ahead.
— Phil Harvey, Senior Editor, Light Reading