Kodeos Lands $6M
The money, an "extension" of a two-year-old Series A, comes from existing investors Highland Capital Partners and Jerusalem Venture Partners, the startup announced today. Kodeos's total funding sits at $22 million (see Kodeos Cops $12 Million and Kodeos Gets Kredit).
The extra money "will take us into the fourth quarter of 2004," says John Wyatt, Kodeos CEO.
Kodeos's expertise lies in signal processing. The idea -- commonly wielded in optics and electronics -- is to pre-distort a signal so that it will come out cleanly on the receiving end, ultimately cutting costs by removing the need for dispersion compensation or forward error correction. Using proprietary algorithms, Kodeos claims to be able to send 10-Gbit/s signals as far as 200 km (see Kodeos Claims 10-Gig Record).
Big Bear Networks is pursuing similar ideas, adding polarization mode dispersion (PMD) compensation to the mix (see Big Bear Promises Picnic).
So, given that both the long-haul and 10-Gbit/s markets are in a dry spell, when does the world start to need Kodeos? Jon Auerbach, a principal with Highland, admits Kodeos has been "a timing question" since its inception in 2001, but he still thinks the market will come around. "We have seen signs from the industry in the last six months that [carriers] are moving the way we thought they would," he says.
Moreover, Kodeos gives Highland a foothold in something a little different, albeit chancey, as opposed to the cluster of startups that will be vying for shorter-reach 10-Gbit/s business. "That's very commoditized already. You've got a lot of interest, but there's a lot of players there," Auerbach says.
Kodeos has managed to sample 120km and 150km transponders, but those are being shelved in favor of a 160km issue called the Kodeos Optical Modem 300, Wyatt says. The plan is to sample the KOM300 by the end of the year, with volume production possible in the second quarter of 2004.
"My expectation is a recovery in 2004. It might be the latter part of 04, but it will start to recover," Wyatt says.
— Craig Matsumoto, Senior Editor, Light Reading