Fultz Joins AcceLight as CEO
Where Jim Fultz goes, acquisitions seem to follow.
Since the end of 2000, Fultz has been appointed CEO of two different startups, both of which were sold (ka-ching!) within a year of his arrival. Now the serial CEO has shown up at core optical switching startup AcceLight Networks Inc. So, does this mean the company is on the selling block?
“You sound like the staff when I first got here three weeks ago,” says Fultz. “They thought Darth Vader had just arrived. But the truth is that we have no intention of selling the company and there hasn’t even been any discussion of it.”
Fultz made similar comments after arriving at Zaffire Inc. in December 2000, coming from a role as vice president of sales and marketing at Antec Corp. (see Zaffire: 'We're not for Sale', Zaffire Names New CEO). Fultz was the third CEO appointed to the top post at Zaffire within six months, and the executive shuffling sparked rumors that the company was for sale. Fultz wholeheartedly denied those claims. Then Centerpoint Broadband Technologies Inc., another privately held company, bought Zaffire for an undisclosed amount in early July 2001 (see Centerpoint Scoops Up Zaffire).
“When I talked to you for that story on Zaffire, we really didn’t have any intention of selling the company,” he says. “But as the year went on, it became clear that was the best strategy for everyone involved.”
Unfortunately the acquisition hasn’t helped Centerpoint, which now appears to be on the brink of collapse (see New Wave of Startup Layoffs).
Fultz’s next startup and acquisition got off to a much more promising start. After leaving Zaffire in July, Fultz became CEO of Scion Photonics Inc., a components startup focusing on waveguide technology, in October 2001 (see Scion Picks Fultz). Seven months later, the company was bought by JDS Uniphase Corp. (Nasdaq: JDSU; Toronto: JDU) for $43 million (see JDSU Posts Loss, Buys Startup).
There has been some speculation recently that AcceLight could be in hibernation (see Bear Market Inspires Hibernation). Since it announced "the world's first photonic service switch" last year, not much has been heard from the company: It still hasn’t officially announced the product or any customers, and it even bowed out of this year’s Supercomm tradeshow.
Fultz denies these rumors, countering that AcceLight is currently raising its third round of funding. The last round closed in November 2001, to the tune of $60 million in equity and debt financing (see AcceLight Scores Major Change). Fultz says it's still too early to disclose any details about the new funding, but he claims it should be enough to sustain the company’s burn rate through 2004. The company currently employs some 215 people, split between its facilities in Pittsburgh and Ottawa.
Fultz also says the company is in its second phase of trials with a key Asian carrier. It's also targeting similar trials in three North American, non-RBOC carriers. The product itself combines TDM, packet and lambda switching with GMPLS signaling into one box. Its primary competition comes from other optical switch vendors such as Ciena Corp. (Nasdaq: CIEN), Nortel Networks Corp. (NYSE/Toronto: NT), Lucent Technologies Inc. (NYSE: LU), Sycamore Networks Inc. (Nasdaq: SCMR), and Alcatel SA (NYSE: ALA; Paris: CGEP:PA).
Fultz swears he's finished with the acquisition scene (at least for the moment). After his stint as Scion, he says he spent five and a half months looking for a startup he could “take to the finish line." However, he has also hinted that in the long run, AcceLight could be dressing itself up for suitors.
“Carl Russo taught me early on that if you don’t have boxes in the sales channel, your value is limited,” he says. “Companies that are research-driven are a difficult sell to shareholders. Unless a company has a commercially viable product, it doesn’t make sense to buy it. That’s why we are doing it this way.”
— Marguerite Reardon, Senior Editor, Light Reading