Santur Tunes In $10M

Startup Santur Corp. has secured $10 million in third-round funding, enough to see tunable lasers to manufacturing daylight, company officials say.

The round was led by VantagePoint Venture Partners and fleshed out by Santur's previous investors: Lighthouse Capital Partners, Menlo Ventures, Sequoia Capital, and Thomas Weisel Venture Partners (see Santur Raises $10M Round C).

Santur is one of several companies that have been waiting for the market to embrace tunable lasers. The devices were expected to be the future for DWDM, as they could make inventory simpler. (For a detailed list of the arguments, see Tunable Lasers Revisited).

But companies took longer than expected to get the technology working, and the devices initially were too expensive to compete with regular distributed-feedback (DFB) lasers. Then the downturn hit, and tunable laser projects started getting swept into the gutter like dead leaves (see ADC Tunes Out, Tough Times for Tunable Lasers, and Bandwidth9 Goes Dark).

Santur may have had an advantage in starting late. Some tunable laser startups raised more than $100 million and subsequently scaled back dramatically (see Agility Gets $83M Third Round and Headcount: Job Market Blues, for example).

By contrast, Santur has raised $53 million and employs just 40 people (see Tunable Lasers: Back in Fashion?).

"We started a bit later, so we never got really big," Craig says. Other tunable laser startups "built out infrastructure before they were ready."

Santur expects the funding to be its last, as the market for tunables is finally coming around. Substantial revenues might still be a year away, but service providers and transponder makers are buying in to the tunable argument, CEO Richard Craig says.

"We're taking slots away, not from specialty players like Iolon Inc. and Agility Communications Inc. We're taking on the thermally tunable DFBs," Craig says.

Thermally tunable lasers have been around for a long time, but they only cover a small portion of the C-band, the spectrum between 1525nm and 1625nm. Most tunable laser vendors hope to eclipse the thermally tunable market by producing lasers that can cover the entire C-band.

Santur's parts are based on micro-electromechanical systems (MEMS). Santur lines up an array of 12 thermally tunable DFBs, each one covering a piece of the C band, and uses MEMS to select one of the lasers. That DFB is then tuned to the desired wavelength.

Fujitsu Quantum Devices Ltd. and Quantum Devices Inc. (QDI) (no relation) are pursuing similar DFB-array tunables. Meanwhile, other forms of tunability have been developed by companies including Agility, BeamExpress Inc., Iolon, JDS Uniphase Corp. (Nasdaq: JDSU; Toronto: JDU), and Princeton Optronics Inc. And some companies such as Pirelli SpA are hoping to get into tunables as well (see Pirelli Returns ).

— Craig Matsumoto, Senior Editor, Light Reading