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Ex-Alcatel Crew Raises $25M

Light Reading
News Analysis
Light Reading
11/28/2000

Allegro Networks, a startup focused on broadband access, announced its first round of funding totaling $25 million today. Bessemer Venture Partners, Columbia Capital, and Infinity Capital participated in the round.

The company is developing a new platform for broadband access that will help service providers move into new markets with less infrastructure, says the vendor.

What makes the startup interesting is the team it has brought together. Five of the eight founders are ex-Alcatel SA (NYSE: ALA: Paris: CGEP:PA) execs. Four of those alums are from the 1998 Packet Engines acquisition. And the main software expert is from Xylan, a LAN switching company also acquired by Alcatel.

P.J. Singh, chief technical officer and acting CEO, was previously a founder and vice president of engineering at Packet Engines. He is considered a leading authority on gigabit Ethernet technology. Singh also helped author standards for the The Institute of Electrical and Electronics Engineers Inc. (IEEE) 802.1P/q working groups, which cover quality of service in LANs.

Shekar Nair, co-founder and director of software engineering, was the principal software architect at Xylan. Frank Lawrence, director of hardware and system architect, also comes from Packet Engines, while David Roth, director of ASIC design, brings expertise from both Packet Engines and NexGen Inc.

On the marketing side, the company has talent from other companies, as well. David Ginsburg, vice president of marketing, was VP of marketing for the Nortel Networks Corp. (NYSE/Toronto: NT) IP Services business unit (via the Shasta acquisition). Before that he was in marketing at Cisco Systems Inc. (Nasdaq: CSCO). And David Bannon, vice president of North American sales, was most recently vice president of sales at RiverDelta Networks.

An actual product isn’t planned for release until the second half of 2001. This round of funding should be enough to fuel development until August of next year, says Matthew Glenn, director of product management for Allegro.

As for details about the product, those are scarce. Even though the vendor claims to have gotten talent from Cisco’s terabit router team, Glenn says that it isn’t building a terabit router. And even though the product sits at the edge and provides “multiple services," it is not a multiservice provisioning platform. It also won’t compete with aggregation products from other vendors like Redback Networks Inc. (Nasdaq: RBAK) and Cisco, say executives. So what will it look like in the end? That is still under wraps, but the company says it is already talking to and working with large service providers.

“It’s an entirely new category of product,” says Glenn. “And it will complement all these other product types. No one else has concentrated on providing a box that will have this level of service.”

-- Marguerite Reardon, senior editor, Light Reading, http://www.lightreading.com

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