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Optical/IP

Luminous Lands More Loot

It's been a long wait, but Luminous Networks Inc. claims to be on the verge of several large contracts.

Yes, after a long slog and at least $183 million cumulatively invested, Luminous is on the verge of greatness -- or, at least, real goodness. The company is close to deals with six major carriers spread around the globe -- two in North America, two in Asia, one in Europe, and one in Australia, according to director of marketing Frank Petkovich.

But big-name buyers can take years to land, and many a startup has died trying. To that end, Luminous secured well more than $10 million in a June funding round, officials say. The money comes from Luminous's prior investors.

The money is meant "just as a safety cushion" to ensure Luminous can wait out the final stages of "some accounts we'd been working on for a couple of years now," Petkovich says. Luminous doesn't immediately need the money; this is all just in case, he says.

The amount is not being disclosed but is in the "low tens" of millions, Petkovich says. The round was closed with little fanfare -- Luminous's investors opted not to do a press release -- and is being augmented by a more recent $7.5 million debt financing.

It's taken at least six funding rounds to keep Luminous going, the most recent being a 2003 round for $25 million from investors including Ciena Corp. (Nasdaq: CIEN). Luminous first came to attention during the Resilient Packet Ring Technology (RPR) fervor circa 2000, along with startups Corrigent Systems Inc., which remains independent, and Lantern, which was snatched up by C-COR Corp. (Nasdaq: CCBL). (See Ciena Links Up With Luminous and C-COR Extinguishes Lantern.)

Luminous has been tied to big-name carriers before but without breakthrough results, a pattern that landed the company on -- and off -- Light Reading's Top 10 Private Companies list twice (see Luminous).

But Luminous has shown signs of life lately, including some small customer announcements. Luminous also sees some possibilities in the emerging micro-MSPP category, a smaller take on the multiservice provisioning platform (see Luminous Shines With 3 New Customers, Luminous Lands Netcom Deal, and Micro MSPPs Are Big). Any MSPP success might cross paths with a burgeoning trend that has some carriers favoring Ethernet over the multiservice boxes, as noted in a recent Light Reading Insider report (see Ethernet Stalks the MSPP).

Separately, Petkovich notes Luminous struck a partnership with broadband equipment vendor Paradyne Networks Inc. (Nasdaq: PDYN), although work there got delayed last month when Zhone Technologies Inc. (Nasdaq: ZHNE) announced a deal to acquire that company (see Zhone to Buy Paradyne for $184M).

— Craig Matsumoto, Senior Editor, Light Reading

Pete Baldwin 12/5/2012 | 3:03:39 AM
re: Luminous Lands More Loot OK, granted, every vendor says they're in talks with 2 or 4 or 20 "tier 1" carriers. Luminous sounds like they might be seriously close to some deals, though.

Their name was paired with China Telecom and Qwest 'way back when ... anyone care to take a crack at who they're dealing with now?
desiEngineer 12/5/2012 | 3:03:38 AM
re: Luminous Lands More Loot "Their name was paired with China Telecom and Qwest 'way back when ... anyone care to take a crack at who they're dealing with now?"

Er, ask you asking who their crack dealer is now?

-desi
canadian 12/5/2012 | 3:03:35 AM
re: Luminous Lands More Loot $183m in funding, 7 yr old company, tired personnel.

When was the last washout round? Who owns the company now?

If they (optimistically) achieve a revenue rate of $40-50m per annum, they'd be making about $5-7m income. At an average Loaded Labour Rate of $150k, they can barely afford 30 employees.

They're achieving $10-20m per annum now.

I don't see an exit in sight. Unless they hit a home run, of course. But their product isn't that great, so that's difficult to imagine...
canadian 12/5/2012 | 3:03:35 AM
re: Luminous Lands More Loot My sources say it's really too early to tell. They have a few operators doing trials, but no real traction in sight.

Apparently, margins are pretty low, too - so one or two deals would still barely keep them alive.

They'd been losing traction in China for a while, I'd be surprised if they succeed there.

Best of luck!
linkv 12/5/2012 | 3:03:33 AM
re: Luminous Lands More Loot Washout, what's that? Oh, you would mean the 50-1 reverse split proposal I've just recieved in the mail...
fiberous 12/5/2012 | 3:01:52 AM
re: Luminous Lands More Loot Link, This is a dead duck.

Luminous's fame is gone!

1. They have platforms that are not even capable of being RPR compliant.
That raises the debt/liability that SA is also carrying.

2. Their future sales revenue is written on a broken back.
Chirs, the CEO, uses his broken back to stay put in Dallas and deal with cars rather than optical gear. The guy has taken the board for a skim.
Ask, Ciena.
linkv 12/5/2012 | 2:58:29 AM
re: Luminous Lands More Loot Fiberous - I'm well aware that LNI is a dead duck! I'm in close contact with chairman of Cienna - on my current board...

linkv

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