Funding for startups

Corning Backs Laser Startup

It’s sometimes said that the easiest way of assessing a startup’s potential is to look at the quality of its investors.

By that reckoning, Iolon Inc. is hot. The backers behind its $53 million second round, announced today, include Corning Inc. (NYSE: GLW), Goldman Sachs & Co. (NYSE: GS) and Kalkhoven, Petit and Levin Ventures, the VC firm set up by Kevin Kalkhoven, the former CEO of JDS Uniphase Inc. (Nasdaq: JDSU; Toronto: JDU).

Additional investment also came from Iolon's first round backers, Kleiner Perkins Caufield & Byers and Optical Capital Group, the venture firm founded by David Huber, president and CEO of Corvis Corp. (Nasdaq: CORV).

And that's just for starters. A whole bunch of other heavyweights participated in this latest round, which was led by Bowman Capital (see Iolon Secures $53M Second Round).

Corning "did very extensive due diligence" on Iolon before committing its cash according to John Clark, Iolon's CEO (see John H. Clark).

So, what proved to be the big attraction?

Two things.

First, Iolon is developing a range of tunable components that promise to deliver much more flexible, cost effective networks -- and also promise to seed a multi-billion dollar market for tunable components.

Iolon's initial product is one of the first widely tunable lasers to be powerful enough to be used on long haul networks. Note the words “one of the first”. Right now, it looks as though it’s in a race with New Focus Inc. (Nasdaq: NUFO), which announced a similar product a couple of weeks ago (see New Focus, New Laser).

Both Iolon and New Focus are making external cavity lasers and both claim their products will deliver 20 milliwatts of power and will be widely tunable – over 40 nanometers in Iolon’s case. 20 milliwatts is an order of magnitude more than other tunable lasers, which typically target shorter distance transmissions in metro networks (see Tune In!).

While both lasers are high power, Iolon's is continuously tunable while New Focus’s jumps between the wavelengths defined by the International Telecommunication Union (ITU) - in the same way that some radios automatically tune to preset stations.

Iolon and New Focus use different technologies to make their external cavity lasers. In Iolon’s case, the tuning is done by turning a mirror to direct light onto different parts of a diffraction grating. The mirror is turned using a tiny actuator made using MEMS (micro-electro-mechanical system) technology.

These MEMS actuators can be used with other externally fabricated optics to create a wide range of components, according to Cindana A. Turkatte, Iolon’s VP of marketing.

Iolon showed a small optical switch based on its actuator at the NFOEC show last year (see Corvis's Secret Sauce?). Since then, however, work on the switch has been put on hold so that Iolon can focus its efforts on tunable lasers, says Turkatte. "Everyone wants our tunable laser," she adds.

The second reason why Iolon is hot is that manufacturing automation has been designed into its developments from the ground up. Clark is expecting this to help drive down costs so that Iolon's tunable components become affordable for more than just long haul transmission equipment.

A lot of Iolon's expertise in this area comes from the mass production of disc-drive components, which have similar requirements to Iolon's actuators in terms of precision, speed and reliability. Iolon got its start in life as a research project at Seagate Technology Inc., a major vendor of data storage equipment and another Iolon shareholder.

Although New Focus announced its laser first, Iolon reckons that it's further ahead. It started shipping samples for evaluation late last year and expects to get approvals from Telcordia Technologies Inc. by mid summer so that commercial shipments can start soon afterwards. "We're four months ahead," says Clark. The corresponding times for New Focus are April for samples and the end of 2001 for commercial shipments, according to its recent announcement.

-- Peter Heywood, international editor, Light Reading http://www.lightreading.com

OpticalValueLine 12/4/2012 | 8:50:58 PM
re: Corning Backs Laser Startup The key in the tunable laser technologies is how compact it is; how compitable it is with current lasers in line; how high speed it can go. If only for tunalbe, every laser company can do it. I am surprised there are so many people talking about tunable lasers but know little about how they will be used in the real world.
redface 12/4/2012 | 8:50:58 PM
re: Corning Backs Laser Startup "While both lasers are high power, Iolon's is continuously tunable while New FocusGÇÖs jumps between the wavelengths defined by the International Telecommunication Union (ITU) - in the same way that some radios automatically tune to preset stations".

I don't think the statement about New Focus is accurate. The key to continuous tunability is the constant optical path length during tuning, which is designed into New Focus' product in the form of a wedge. Therefore, the New Focus laser is continuously tunable, instead of jumping from ITU to ITU.

Peter Heywood 12/4/2012 | 8:50:57 PM
re: Corning Backs Laser Startup On whether New Focus's laser is continuously tunable or not...it made a big thing out of saying it wasn't when speaking to Pauline. Here's an excerpt of the story we ran:

Startup Iolon Inc. is also known to be making an ECL-based tunable laser, but it's pursuing a more tricky design, Smith reckons. "Based on the slides they show, it looks like Iolon is using the cavity configuration that we use in our test and measurement lasers. We abandoned that for telecom lasers ages ago."

He adds that the reason New Focus abandoned the design was because it was continuously tunable, which is hard to do reliably at high powers. PowerTune snaps to any wavelength on the ITU grid and has filters to stabilize it there, he says.

The URL of the whole story is:

Peter Heywood 12/4/2012 | 8:50:57 PM
re: Corning Backs Laser Startup On bulkiness...here's an excerpt of our story on New Focus:

The main gripe about ECLs is that they are big -- typically the size of a shoe box -- but New Focus has overcome this. In fact, it's taken the ECL and modified it out of all recognition. The telecom-grade tunable laser -- called PowerTune -- sits in a module measuring 55x100x12.5 millimeters. That space includes a built-in wavelength locker, power control, and control electronics, unlike other vendors' tunable devices, which often require extra chips around them, according to Paul Smith, VP of the telecom division at New Focus.

Iolon wouldn't tell me how small (or big) its laser was -- it's saving that for another announcement -- but I'd be surprised if it wasn't at least similar in size to the New Focus laser.

The URL for the New Focus story is:


OpticalValueLine 12/4/2012 | 8:50:47 PM
re: Corning Backs Laser Startup I still do not believe the mechanical parts based tunable lasers can go telecom grade. Frankly, I even don't know why extremely-wide tunable range is important, except for testing. In the tunable field, people tend to believe BIG claims. Does anyone still remember Nortel's tunable laser released at the OFC in San Diego two years ago?
jimmer 12/4/2012 | 8:50:47 PM
re: Corning Backs Laser Startup I wonder what type of revenue growth rate they are projecting if they can sell the laser? The product sounds 'mechanical' and inferior to NUFO's. Please tell us more
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