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Optical/IP

Metro-Optix Pulls the Plug

ALLEN, Texas -- Metro-Optix Inc. has said it will cease operations today after failing to convince its investors that it could secure a Tier 1 carrier customer or a strategic partnership with a larger vendor.

"Our investors decided they couldn't put any more money in the company," says a company spokesperson. "The shame of it is that we have about 16 customers running live traffic, and we did have revenue coming in the door. We were finally at a point where we really started feeling good about our product. Our customers were raving about us at Supercomm."

Metro-Optix started as a spinoff of LM Ericsson (Nasdaq: ERICY) in 1999 and has raised about $155 million in funding to date. The company is in the process of letting go its employees in two foreign countries -- about 30 in India and about 114 in Texas.

Its investors include JPMorgan Partners, InterWest Partners, Sevin Rosen Funds, CenterPoint Venture Partners, BlueStream Ventures, J&W Seligman & Co., Wasatch Venture Fund, and others.

This week the company will seek help in selling its assets and intellectual property. It will keep some technical support on staff for a few weeks to help customers, and it may offer its finished goods inventory to those carriers for "pennies on the dollar," the spokesperson says.

Though employees were notified of the company's impending closure on Wednesday, CEO Dave Orr and other executives were up late last night and early this morning courting a last-minute investor, but they couldn't come to an agreement, a spokesperson says.

It is still likely that Metro-Optix might sell to a competitor for cheap, however. "At the last minute, we've had strategic investors coming out of the woodwork. But as far as we're concerned, the plug's been pulled."

— Phil Harvey, Senior Editor, Light Reading

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stuartb 12/4/2012 | 11:53:09 PM
re: Metro-Optix Pulls the Plug on one hand that it happened so quickly. But on the other hand it was inevitable. The product was essentially designed in 1996 or so, and simply not competitive. Still, it's unfortunate for the 120 or so employees. I wish them luck.

-Stu
Litewave 12/4/2012 | 11:53:04 PM
re: Metro-Optix Pulls the Plug But on the other hand it was inevitable. The product was essentially designed in 1996 or so, and simply not competitive..

Too true.

Really begs the question of whether folks like Meriton Networks, Tropic Networks et cetra can ever hope to stay alive.
optobozo 12/4/2012 | 11:53:03 PM
re: Metro-Optix Pulls the Plug "The company is in the process of letting go its employees in two foreign countries -- about 30 in India and about 114 in Texas."

If I ever go to Texas from Massachusetts, I'll remember to bring my passport!
single mode figure 12/4/2012 | 11:53:03 PM
re: Metro-Optix Pulls the Plug I think some have already been planning an exist strategy, Nader is starting a Sub shop...good luck Nader...
lightmaster 12/4/2012 | 11:53:03 PM
re: Metro-Optix Pulls the Plug optobozo,

I don't think that Texas grants visas to people from Massachusetts :)
Kris_Shankar 12/4/2012 | 11:52:56 PM
re: Metro-Optix Pulls the Plug This article was based on an interview with our marcom dept spokesperson. While factually correct, the juxtaposition of unrelated comments could result in mis-interpretation.

The 2nd paragraph attempts to squarely put the onus on investors in what should be a symbiotic relationship between all parties. We had good traction among the only spending segment - the IOCs. This gradually opened doors at Tier-1 carriers, but not with the urgency desired in the business plan. To their credit, our investors explored all creative financing options before recommending the current course.

We stand corrected on how finished goods are offered. An acquiring entity uses its own discretion in discharging contractual obligations. Quite often, the discretion is exercised to the benefit of customers - it is still their prerogative, however.

One post here states the technology was initiated in 1996. As a founder I can assure you that development did not start until early 1999.

Kris Shankar
Marketing & Business Development
William Wallace 12/4/2012 | 11:52:53 PM
re: Metro-Optix Pulls the Plug Kris

Don't waste your breath - everyone on these threads acts as though they know everything

good luck in future endeavors
mordecai 12/4/2012 | 11:52:52 PM
re: Metro-Optix Pulls the Plug Gee, by the sounds of it, people are viewing company longevity and financial returns as the metric of 'success' or 'failure'.

Who says MetroOptix has not been a success?

Sounds like they had many of the elements that make endeavour successful. Product in the field, customers, a team, salaries for years and years.

If someone were to tell me that customers of MetroOptix were dissatisfied, or that the team members hated or did not trust one another, now that would be a different story in my opinion...

I'm sure they learned a lot also. Now on to the next opportunity!
rajesh_mrk 12/4/2012 | 11:52:52 PM
re: Metro-Optix Pulls the Plug Kris,

Dont worry...
Failures are the predecessors of the Successes.
zhadum 12/4/2012 | 11:52:52 PM
re: Metro-Optix Pulls the Plug Kris

You are a good man to respond in the manner you did.

I understand the feelings you must be going through, having a started a new venture with all the honorable goals in mind, and now having to accept market realities and the VC mindset.

Good luck on your next venture and don't waste your time on this chatroom trying to further defend the Metro-Optix cause (I can only imagine there will be more smart-alecs who will add fuel to the fire because many in our quickly-diminishing world take pleasure in another colleague's fall).

Sincerely,

z.
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