CoreOptics Nabs Another $28M
The money brings CoreOptics' total funding to $68 million, including rounds of $21.5 million and $15 million from 2002 and 2003, respectively. (See CoreOptics Raises $28M, CoreOptics Closes $21.5M, and CoreOptics Closes $15M Series C.)
The latest round included Belgian venture capital firm GIMV, which joins as a new investor, and prior investors Atila Ventures , Crescendo Ventures , High Tech Private Equity GmbH , Quest for Growth NV, and TVM Capital .
CoreOptics builds transponder subsystems targeting 40-Gbit/s links, although it's taken the practical step of also offering a 10-Gbit/s DWDM module. Though it's been a long climb, prospects for 40-Gbit/s networking are starting to look up, aided by statements like the recent AT&T Inc. (NYSE: T) pledge for an upcoming OC768 backbone. (See AT&T Readies 40-Gig Backbone.)
The big systems vendors have been making more noise about OC768, too. Cisco Systems Inc. (Nasdaq: CSCO) recently sold its first honest-to-goodness 40-Gbit/s link, in China, while Alcatel (NYSE: ALA; Paris: CGEP:PA), Huawei Technologies Co. Ltd. and Juniper Networks Inc. (NYSE: JNPR) closed out 2005 with 40-Gbit/s announcements. (See Cisco Sells an OC768, Alcatel Touts 40-Gig Deployment, Huawei Intros 40-Gbit/s DWDM, and Juniper Intros Interface.)
Not all investors are ready to buy into the OC768 story, though. The market for 40-Gbit/s links -- meaning real OC768, as opposed to four lanes of 10-Gbit/s -- is too limited, says Drew Lanza, a partner with venture firm Morgenthaler . It's true OC768 links will end up in undersea links and backbone networks, but "they're such small markets," he says.
Lanza sees 10 Gbit/s as a better bet, citing Infinera Corp. (Nasdaq: INFN), a company Morgenthaler didn't invested in. "I'm a big fan of Infinera. That's 100 Gbit/s, but it's 10 times 10 Gbit/s," Lanza says, referring to Infinera's chip that handles 10 links of 10-Gbit/s apiece. "Infinera will probably do better than all the 40-Gbit/s companies together times two."
CoreOptics' expertise lies in electronics rather than optics. Its technology involves using equalization to prevent signal distortion, freeing carriers from having to use dispersion compensation. The cleaner signal also makes it possible to use cheaper optics in the network, CoreOptics officials claim.
"It's the way we are seeing next-generation optical networking evolve: as applications of electronics into the optical layer," says Saied Aramideh, CoreOptics vice president of marketing.
The approach has landed CoreOptics some big-name customers and partners. The company helped Marconi -- since acquired by Ericsson AB (Nasdaq: ERIC) -- to develop 40-Gbit/s transponders destined for Deutsche Telekom AG (NYSE: DT) unit T-Com . CoreOptics separately worked with Fujitsu Microelectronics Europe (FME) to develop a handful of 40-Gbit/s chips that CoreOptics will sell. (See 40-Gig Begins Its Ramp and CoreOptics, Fujitsu Join on 40-Gig.)
More recently, Siemens AG (NYSE: SI; Frankfurt: SIE) signed up to use CoreOptics' equalization technology. (See Siemens Uses CoreOptics Tech.)
CoreOptics even has a play in more modest networks. The avoidance of dispersion compensation makes it possible to run 10-Gbit/s signals on a 2.5-Gbit/s backbone, something second-tier customers might be interested in, Aramideh says.
CoreOptics employs 70, including an R&D team researching modulation schemes for OC768. Some of the new funding will go toward continuing that basic research, Aramideh says.
— Craig Matsumoto, Senior Editor, Light Reading