Comms chips

Dune Digs Up $24M

This week, stealthy startup Dune Networks announced that it has raised $24 million in its first round of funding (see Dune Gets $24M). Even in more fruitful times, that sum of money would make people sit up and take notice.

The investors were Aurum-SBC Ventures (the venture capital arm of SBC Communications Inc.), Pitango Venture Capital, and Jerusalem Venture Partners, in addition to two European-focused funds, Elwin Capital Partners, and Alta Berkeley Venture Partners.

Given that it's a lot more difficult to squeeze money out of investors these days, Dune must have something special. But since the startup's very definitely still in stealth mode, it's difficult to tell what that might be, technology-wise.

Dune's Website doles out the usual waffle, saying it's "a fabless semiconductor company, developing next-generation communication IC solutions enabling LAN, WAN and SAN network vendors to build truly scalable communication platforms." Michal Kahan, its VP of product marketing, declined to expand on that, which piqued our interest.

Jag Bolaria, analyst with technical consultancy the Linley Group, claims he can shed some light: "It is making a switch fabric that scales up to terabit kind of ranges. That goes hand in hand with the executive team's experience in terabit-class routers."

This would mean Dune's key competitors will be Agere Systems (NYSE: AGR) and Applied Micro Circuits Corp. (AMCC) (Nasdaq: AMCC), as well as startups such as ZettaCom Inc. (see AMCC Raises Eyebrows).

The heritage of the startup's executive team offers a few pointers. It includes Eyal Dagan, the routing expert who previously founded Charlotte’s Web Networks Ltd. Prior to that, he was the VP of R&D for MRV Communications Inc.'s (Nasdaq: MRVC) switching division in Israel.

Two other key executives were previously involved in founding Zuma Networks Inc., which makes a Layer 2-4 switch with integrated IP services (see Zuma Integrates the Edge). Dune's CTO, Ofer Iny, served as Zuma's chief scientist from that's company's inception. Moti Weizman, who was Zuma's general manager, is now Dune's COO.

While Charlotte's Web and Zuma may not be among the all-time most-successful startups, in theory they still exist -- although Zuma's Website has been stagnating since late 2001. Both Charlotte's Web and Zuma are part of MRV's portfolio, but Dune doesn't appear to have any current MRV connections.

In light of the above, it seems that packet processing could also be key. This is confirmed by Dune's membership in the Network Processing Forum (NPF) and in Intel Corp.'s (Nasdaq: INTC) IXA Developer Network, which is a forum of companies whose products support, interoperate with, or are compatible with Intel's IXP family of network processors (membership in which, incidentally, costs $3,000 a year).

— Pauline Rigby, Senior Editor, Light Reading

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