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Optical/IP

The Top Ten Movers and Shakers in Optical Networking

Ferri Talks Only to Anderson...

image of Paul Ferri and Not Ed Anderson Wait, what’s this? Two VCs from different firms? Yes. Ferri and camera-shy Anderson work for Matrix Partners and North Bridge Venture Partners, respectively. But in the tightly knit circle of Boston-area communications startups, they travel as a pair.

In fact, they have similar styles (stoic and tough, with a penchant for entrepreneurs with track records). It’s all part of that clubby, Noreast thing. They’re likely to swing some clubs down at the Andover Country Club, then do a deal with a former Lucent Technologies Inc. (NYSE: LU) engineer over some chowdah. They’re both well connected to most of the top Boston-area startup legends, including Sycamore Networks Inc.'s (Nasdaq: SCMR) Desh Deshpande and former Wellfleet CEO Paul Severino. And they tend to be attached at the hip on the same deals. Been doing this for years.

For example, Matrix and North Bridge were the two largest investors (after founder Deshpande and CEO Dan Smith) in Sycamore Networks. Most of their deals start with talent coming out of the Massachusetts startup legends Cascade Communications and Wellfleet, both of which were funded by Matrix and North Bridge. A more recent crop of communications companies they have in common includes Argon (acquired by Siemens AG [NYSE: SI; Frankfurt: SIE]), Arrowpoint (acquired by Cisco Systems Inc. [Nasdaq: CSCO]), NetCore (sold to Tellabs Inc. [Nasdaq: TLAB; Frankfurt: BTLA]), Sycamore (IPO), Redstone (acquired by Siemens), Prominet (sold to Lucent) and Spring Tide (acquired by Lucent).

Last big hit: Sonus Networks Inc. (Nasdaq: SONS), the voice-over-IP switching specialist that went public in 2000 and whose stock has risen 269 percent from its IPO price. Sycamore, a Matrix and North Bridge investment, was a giant hit at the time of the IPO in 1999, but its stock is now down 20 percent from its IPO price. Of course, Ferri and Matrix pocketed millions for themselves and their clients, selling most of their Sycamore shares when they were still in the triple digits.

What’s going on now? Matrix and North Bridge have generated a small cottage industry of optical startups. There’s Appian Communications, Équipe Communications Corp., and Tenor Networks Inc., all touched by the Ferri/Anderson tag team. Recently, they’ve moved into more cutting-edge optics by funding PhotonEx Corp., a startup promising 40-Gbit/s DWDM systems by the end of the year (see PhotonEx Set to Demo 40 Gig).

So why are Ferri and Anderson suddenly making the list? While many VCs have gone gun shy in these taxing times (see Vinod Khosla), Ferri and Anderson are still active, making more recent investments in such companies as PhotonEx, kSaria Corp. (North Bridge), and Onetta (Matrix). They’re extending their optical portfolio into the next generation, when the telecommunications market should be headed toward a recovery [knock wood here]. PhotonEx, staffed with a braintrust out of MIT’s Lincoln Labs (the breeding ground of Sycamore’s talent), looks to be a leading future IPO candidate. They say their first product will be out by the end of the year. Onetta, led by former Redback Networks Inc. (Nasdaq: RBAK) CEO Dennis Barsema, is targeting the amplifier market.

Is this a World Series team of optical companies, or will this just be another Beantown disappointment? The West Coast VC world – most notably Khosla – had a leg up in the last generation of networking IPOs with blockbusters such as Juniper Networks Inc. (Nasdaq: JNPR) and ONI Systems Inc. (Nasdaq: ONIS). Matrix and North Bridge will at least make it to the playoffs, but they haven’t yet developed a long-term championship dynasty. The next six months will likely tell whether these guys have the staying power for the list.

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MrLight 12/4/2012 | 9:33:42 PM
re: The Top Ten Movers and Shakers in Optical Networking Yes for startups, if they have the right product, at the right time and at the right price.

However, it looks like the "The Top Ten Movers and Shakers in Optical Networking" needs updating.

We should at least have someone from Cisco, Ciena, Juniper (well they will get more optical), Nortel/lucent (yoyr pick), JDSU, Bookham, Huawei, Tellabs/Fujitsu

also a VC name, a customer name (who is building an optical Ethernet network say), and finally someone in one of the new up and coming startups.

MrLight :-Q,wanting some light shed on the new movers and shakers
actual 12/4/2012 | 8:20:46 PM
re: The Top Ten Movers and Shakers in Optical Networking Absolutely amazing piece of garbage. Lightreading is becoming the National Enqirer of Optical Networking
NoObjectivity 12/4/2012 | 8:20:45 PM
re: The Top Ten Movers and Shakers in Optical Networking Crappy, desparate pseudo-humour on Russo and Lucent, nonsensical tech ranking...these guys are sinking.
fatchance 12/4/2012 | 8:20:43 PM
re: The Top Ten Movers and Shakers in Optical Networking This must be a slow news day, at least give us some real scandals or at least make up something outrageous that will get the message board burning. You can always print a retraction later.
noitall 12/4/2012 | 8:20:42 PM
re: The Top Ten Movers and Shakers in Optical Networking he's not only very smart, and very connected but he's a humble, decent guy who people can trust. worldview is the best vc firm you've never heard of, that's true, but it's for a good reason: they spend more time with their companies than promoting themselves.
noitall 12/4/2012 | 8:20:37 PM
re: The Top Ten Movers and Shakers in Optical Networking what has cisco done in optics???? the cerent box is the ONLY real success story they've ever had and now that product is under fire from multiple vendors, they have no products they've built that are really compelling under his leadership...and anyone who's serious about optics knows cisco's product line, across the board, sucks....pirelli? shut down. qeyton? shut down. they are nowhere in optics! is lr on the cisco payroll?
optical-tracker 12/4/2012 | 8:20:35 PM
re: The Top Ten Movers and Shakers in Optical Networking Keep looking for Joe Furgerson and let us know where he is. I have a marketing position he would be great for.
bear 12/4/2012 | 8:20:32 PM
re: The Top Ten Movers and Shakers in Optical Networking that's part of the fun in it...chill out and stay a while.
bear 12/4/2012 | 8:20:32 PM
re: The Top Ten Movers and Shakers in Optical Networking agreed
LightCycle 12/4/2012 | 8:20:31 PM
re: The Top Ten Movers and Shakers in Optical Networking Here's a little kicker on Huber.

Apparently in recent months hes been introducing himself to potential Carrier customers as "...I co-founded CIENA..."

Nice foot-in-the-door Huber!
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