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Photuris Gets New CEO and $40M

Light Reading
News Analysis
Light Reading
2/24/2003

Things they are a-changin' at Photuris.

This week the optical equipment startup will announce it has hired former Nortel Networks Corp. (NYSE/Toronto: NT) marketing executive Charles Childers as its new CEO. The company has also filled its VP of sales slot, a position that had been open since summer of 2002, when Pat Rockford left to join White Rock Networks.

Photuris's previous CEO, Mike Pisterzi, left last month. Pisterzi was formerly CEO of AccessLAN, which was sold to Advanced Fibre Communications Inc. (AFC) (Nasdaq: AFCI).

Thrown in with the management changes is news that Photuris closed a Series C financing of $40 million. The round, first reported by Light Reading in September 2002, closed the following December (see Photuris Metro Box May Draw $40M). The most recent financing means Photuris has raised about $105 million during its three-year history.

In addition to the funding, Photuris says it has completed five lab trials with a set of cable multiple service operators (MSOs) and competitive local exchange carriers. In addition, the company says that two independent local exchange carriers have started putting its gear through trials.

Photuris's new VP of sales is Jim Lowrie. Lowrie joined from Alcatel SA (NYSE: ALA; Paris: CGEP:PA), where he landed as part of Alcatel's acquisition of Astral Point.

Childers previously served as CEO of Teleglobe (NYSE, Toronto: BCE), and, prior to that, he was chief marketing officer at Nortel Networks.

"It's a very tough market whether you're at Nortel, Teleglobe, or Photuris," Childers says. "The difference is that we can focus on building one thing and make it excellent."

The thing Photuris is building is a transport solution for metro rings that combines the functions of a Sonet add/drop multiplexer (ADM) with a DWDM transport box.

The box, the V32000 Optical Distribution System, has several things going for it. First, it combines two network elements in one, which saves space and energy. Also, it will be able to switch any wavelength to any port.

Photuris also boasts that its box can add and drop single wavelengths, versus having to add and drop several bands of wavelengths, as you do on older, fixed ADMs. But in order to assign bandwidth onto single wavelengths optically, that is, without optical-to-electrical conversions, it would require an operator to have several Photuris boxes on its metro ring.

Because of its many talents, Photuris competes with several established vendors, depending on the network it is trying to penetrate. The company competes with Sonet ADMs such as those sold by Fujitsu Network Communications Inc. (FNC), Cisco Systems Inc. (Nasdaq: CSCO), and Lucent Technologies Inc. (NYSE: LU), as well as WDM boxes such as those sold by Ciena Corp. (Nasdaq: CIEN), Nortel, and Lucent.

The startup intends to take on the big guys by pairing up with either another equipment vendor or a systems integrator. "We will be coming to market with a partner," promises Childers. "We are in discussions now."

Also, as do most startups, Photuris sees a spot for itself thanks to slowed research and development activities in the rest of the industry. "All of these large companies have cut back on R&D, and next-generation products aren't forthcoming in a lot of areas," says Childers.

Photuris is also fortunate in that, so far, its investors have backed the company consistently. The company's most recent financing round comprised money from Columbia Capital, Artiman Ventures, and Greylock, Childers says, the same lot that have been behind the company since day one.

With its product generally available and its headcount holding steady at around 100, Childers says Photuris is set to start filling orders and booking revenues in the second half of this year.

— Phil Harvey, Senior Editor, Light Reading

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testdude
testdude
12/5/2012 | 12:34:41 AM
re: Photuris Gets New CEO and $40M
I think this is great to hear that good startups are still getting C rounds. Usually C rounds meant a company had customer's and revenue's which is difficult in the current environment.

I'm just not sure there's much difference with these guys and other metro startups like Tropic, meriton, mahi... which are all drumming the same tune with needing to partner with a big vendor for any serious sales.

Cisco/Nortel/Alcatel/Ciena can't be partnering with all these guys.

Does Photuris have anything over these other guys.

Dude
pipesoflight
pipesoflight
12/5/2012 | 12:34:39 AM
re: Photuris Gets New CEO and $40M
Photuris and White Rock Networks Complete Interoperability Testing of Fully-Automated Optical Layer in Sept-2002. Could there be any partnering with WRN for a customer? ADC offers systems integration services for WRN currently.
gea
gea
12/5/2012 | 12:34:33 AM
re: Photuris Gets New CEO and $40M
WhiteRock stackable boxes at the edge and CPE, Photuris boxes in the Metro Core. Could work.

They've got good people, including Vengsarkar, Bonenfant, Morales, and the inimitable and fiery Kay Min, all industry vets. If anyone could make it in this environment, it's them.
curious_georgette
curious_georgette
12/5/2012 | 12:34:23 AM
re: Photuris Gets New CEO and $40M
Where is the fiery 'Reindeer' these days anyway? Maybe the meds and coffee have started to kick in ;-)
optical
optical
12/5/2012 | 12:34:22 AM
re: Photuris Gets New CEO and $40M
pipesoflight is a White Rock employee, so fuss up before you continue to try to creat buzz around your company
gea
gea
12/5/2012 | 12:34:21 AM
re: Photuris Gets New CEO and $40M
Booby wrote...

"How will the company stay in businees?"

I suggest that if you somehow snuck onto one of Photuris' competitors payrolls, the feelings of depression and disillusionment there would be so great as to put them out of business (you currently 'work' for Lucent, right?), thereby increasing Photuris' chances. (In that case, you'd be kind of a 'tactical nuke'.)
BobbyMax
BobbyMax
12/5/2012 | 12:34:21 AM
re: Photuris Gets New CEO and $40M
With Mike Pisterzi, it appears that Photuris is positioning itself to be acquired. Why was Pisterzi was appointended as CEO? What does he bring to the table?

If they decide to stay in business I think that they should show profitability at least for three years and be in full compliance with the prevailing auditing standards.

Photuris has not chosen multiservice CWDM platform, which would considerably reduce the cost in the metro environment. There are many other vendors who can add/drop services from a single wavelength.

The metro market is very crowded with over 20 vendors. How will the company stay in businees? It is difficult to understand as to why the VCs
gave $40M to Photuris?
ajar
ajar
12/5/2012 | 12:34:20 AM
re: Photuris Gets New CEO and $40M
Booby wrote

"With Mike Pisterzi, it appears that Photuris is positioning itself to be acquired. Why was Pisterzi was appointended as CEO? What does he bring to the table?"

Did you read the article? Pisterzi is out and Childers is the new CEO....

Maybe I just don't understand the Boobyism's....

On another note:

Does anyone know how long $40M will last Photuris? with approx 100 employees left, my guess is more than two years....

Any thoughts?

-ajar
gea
gea
12/5/2012 | 12:34:20 AM
re: Photuris Gets New CEO and $40M
As for Booby not even reading the articles he comments on, here's what I wrote on the "Force10" article board:


"You must be new here. BoobyMax is notorious for not bothering lifting a finger to determin anything resembling a "fact". In fact, if you search the archives, you'll see that he often doesn't even read past the first paragraph of the Lightreading article before making some absurd pronouncement.

Here's Booby ranting on the uselessnes of higher bandwidth in the local loop, apparently unaware that the article was about a backplane manufacturer:

http://www.lightreading.com/bo..."
gea
gea
12/5/2012 | 12:34:20 AM
re: Photuris Gets New CEO and $40M
Curious Georgette wrote...

"Where is the fiery 'Reindeer' these days anyway? Maybe the meds and coffee have started to kick in ;-)"

After the Corvis posts, I asked around and it was said that Reindeer was not who we thought. I have my doubts, though. The fiery, manic "coffee" jokes seem WAY to appropo!

BTW...Do I know YOU? Do you (or did you) ever work for Bellcore and then RHK?
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