Optical/IP Networks

White Rock Feeds on More Funding

White Rock Networks CEO Lonnie Martin describes his company's latest funding round as "a progressive dinner."

"The first money was raised in July, close to when our cash was running out," Martin says. Since then, further courses of cash have arrived, culminating in a third-round total of $60 million, announced today (see White Rock Scores $60M).

White Rock's success in raising this money in the current climate suggests that its product -- a small Sonet add/drop multiplexer built for metropolitan networks -- targets an area where there's still a decent prospect of service providers buying equipment.

After a few setbacks, the company's OC48 (2.5 Gbit/s) product, the VLX2010, began trials with four unnamed competitive local exchange carriers (CLECs) in the second week of September, Martin says. He expects the product will be ready for general availability toward the end of this month.

White Rock's OC192 (10 Gbit/s) offering, the VLX2020, won't likely begin trials until March 2002 and should begin the OSMINE certification process soon, Martin says. Telcordia Technologies Inc.'s OSMINE certification process is a necessary, time-consuming, and expensive hurdle for companies that want to sell to incumbent carriers (see Telcordia's Osmine Gold Mine).

Martin says White Rock abandoned plans to get its OC48 product OSMINE certified because of the money involved and because the company felt that incumbent carriers would be more interested in OC192 in the coming months.

Unlike its competitors, such as Metro-Optix Inc., Redback Networks Inc. (Nasdaq: RBAK), and others, White Rock is only concentrating on making a fast optical transport box, not routers or various kinds of optical services. "When the components improve, we may move up into the services layer, but not now," says Martin.

It won't be clear until sometime next year whether that bet will pay off. But with so many carriers more concerned with wringing money out of Sonet networks, White Rock may stand a chance, especially if it can compete on price with Cisco Systems Inc. (Nasdaq: CSCO) and other rivals.

The company has about 205 employees, a number that's held steady since June, Martin says.

Its investors include Oak Investment Partners, Mayfield Fund, Meritech Capital Partners, Hook Partners, Fremont Communications, Fremont Ventures, Investor AB (through its Investor Growth Capital subsidiary), Gulf International Bank, Cypress Semiconductor Corp. (NYSE: CY), and Pacesetter Capital Group.

The company has raised $102 million since it was founded in 1999.

— Phil Harvey, Senior Editor, Light Reading
poster 12/4/2012 | 7:36:53 PM
re: White Rock Feeds on More Funding yeah yeah, 2.5Gbps...
poster 12/4/2012 | 7:36:53 PM
re: White Rock Feeds on More Funding trials with 'some CLECs', 'cash was running out', changing product strategy, limted functionality, competing against cisco entirely on price??

what exactly is a 'fast optical transport box'? does their oc-48 goes faster than everyone elses 2.Gbps? does it have flames painted on the side?

toll booth willy 12/4/2012 | 7:36:43 PM
re: White Rock Feeds on More Funding Well, I believe in telecom, bandwidth, scalability, the hanging NASDAQ, high fiber, good investors, that the novels of Geoffrey Moore are self-indulgent, overrated crap. I believe Lee Rich McGinn acted alone. I believe there ought to be a constitutional amendment outlawing unbundling. I believe in the sweet spot of the market, pull sales strategies, announcing your earnings after the quarter rather than pre-announcing during the quarter and I believe in long, slow, deep, soft, field trials that last three days. [pause] Goodnight.
poster 12/4/2012 | 7:36:41 PM
re: White Rock Feeds on More Funding oh my...
nevermind 12/4/2012 | 7:36:36 PM
re: White Rock Feeds on More Funding any clues about pre/post-money valuation?
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