Router Startup Banks $42M, Cuts Staff

When was the last time the router sector was this interesting?

In the wake of a number of significant product upgrades and launches, and coupled with the challenge to the status quo from the virtualization brigade, startup vendor Compass-EOS has banked $42 million in a fresh round of investment. (See SDN Middleman: A Second Look at Juniper's MetaFabric, Cisco's ACI Gets Physical With SDN, Cisco Unveils Carrier SDN Network Fabric, and Huawei Router Passes 400G Test.)

But in an unusual twist, the company has cut its headcount from about 150 staff to about 100 at the same time. A company representative says Compass-EOS is still focused on product innovation but is now turning its attentions more to sales and marketing.

The new round, which takes the company's total funding to date to $160 million, came from existing investors – including Benchmark Capital , Comcast Ventures , and Cisco Systems Inc. (Nasdaq: CSCO) -- and two new backers (an unidentified private equity fund and Russia's RUSNANO.

The team at Compass-EOS, which was shortlisted for the Leading Lights Best New Product (Telecom) award recently, has developed a platform based around on-chip photonics that enables the production of a router that is smaller, consumes less power, has higher port densities and is easier to scale than traditional packet routing systems. (See Photonics Fire Up Radical Core Router Startup.)

The approach has caught more than just the eye of investors, as NTT Communications Corp. (NYSE: NTT) and CERNET, China's Education Research Network, have both selected the new router for their networks and the startup has secured distribution partners in Australia and Japan. (See NTT Picks Radical Compass-EOS Router, China's Cernet Picks Compass-EOS, and Compass-EOS Targets Japan With Core Router .)

— Ray Le Maistre, Editor-in-Chief, Light Reading

Carol Wilson 11/18/2013 | 7:00:56 PM
Re: Silver lining with a cloud The voice of reason, as always. 
brookseven 11/18/2013 | 4:09:51 PM
Re: Silver lining with a cloud What is likely is that the new investors went in only on a reduced burn rate.



Carol Wilson 11/18/2013 | 3:50:42 PM
Re: Silver lining with a cloud Oh, so all the non-strategic folks got the boot. Or those working in unpopular markets. 
[email protected] 11/18/2013 | 3:27:49 PM
Re: Silver lining with a cloud Here's the official line:


"Compass-EOS is focusing on strategic next generation products they are developing while focusing on specific geographies and market segments. This kind of a move has implications both on R&D and regional workforce."


Not shedding any light on the situation, is it.

There will be folks out there who know, though...
Carol Wilson 11/18/2013 | 3:01:29 PM
Re: Silver lining with a cloud So if they are now focused on sales and marketing, did they cut back the engineering talent that created their fancy new router to begin with?
[email protected] 11/18/2013 | 2:53:27 PM
Silver lining with a cloud What a mixed back.... great that there is funding for an innovative startup, not so great that the fnuding round comes with a headcount cut. That's got to hurt even more for those that haven't made the cut.
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