Siros Gets $17 Million in Funding

With an announcement today that it has received $17 million in additional funding from both existing and new investors, Siros Technologies Inc. prepares to exit stealth mode. But it’s still keeping its plans very quiet.

This is the first public announcement from Siros, but specific details are noticeably lacking. Although Siros states that the additional funding will be used to complete the development of its product and bring it to market, it will not disclose what, precisely, the product is. And although Anjay Anand, executive VP of marketing and business development, insists that the money will last the company through shipping, he won’t say when that might happen. (Observers say shipping could start by year’s end.) Anand is also reluctant to reveal the exact number of customers that have voiced interest in Siros’s platform, though he claims the number is large and growing.

So what information, exactly, is Siros willing to divulge? Well, Siros boasts that it has solved the problem of making highly efficient long-wavelength Vertical Cavity Surface Emitting Lasers (VCSELs), something that has perplexed vendors for years. While VCSELs operating at 850 nanometers are so superior to traditional edge-emitting lasers that they have completely replaced them in distances less than 300 meters, long-wavelength VCSELs are not quite up to scratch (see Laser Blazers).

The company has, according to this announcement, developed a new high-power VCSEL-based component that can be reliably produced in volume at a fraction of the cost of other solutions. The new platform will work, the company claims, on a broad range of metro-access, metro-core, and long-haul applications.

But then, once again, the lips are sealed: Siros won’t go into details about the new platform, nor will it reveal whether it is developing long-wavelength VCSEL technology operating at 1310 or at 1550 nanometers, each one being suitable for different applications (see Startup Makes Waves in VCSEL Market and Intel Backs VCSEL Startup).

However, a little detective work indicates that Siros is working on 1550nm technology. For starters, Marcia Bencala, a Siros employee, has published an article called “The Next Revolution in Lasers: 1550nm VCSELs,” in Fiberoptic Product News. The company also states on its website that it’s going after DWDM and long-haul applications. As 1310nm lasers are limited to about a 40km reach and can’t do DWDM, it will need 1550nm for that.

There are also some clues in the company’s past: Before Siros changed its focus to optical transmission in mid-2000, it was working on holographic data storage. For that application, it developed a high-power, high-density side-emitting laser, called a VSAL (very small aperture laser). The company then reported a breakthrough in VCSEL power by using a VSAL to optically pump a VCSEL (see Siros Claims VCSEL Breakthrough).

If Siros has transferred this technique to telecom, observers say the company could avoid the material problems associated with making electrically-pumped VCSELs at 1550nm. This makes its approach similar to that of CoreTek, the startup bought by Nortel Networks Corp. (NYSE/Toronto: NT) in 2000, which also uses optical pumping (see Nortel Gambles $1.43 Billion On Tunable Lasers). If this is indeed Siros's game, it could mean that it will have a higher power 1550nm VCSEL than its competitors.

Supporting this conclusion: Siros’s Anand does say that power level “is one of the things that makes [our platform] superior.”

Even with a “superior” platform, competition in this market will be tough. Siros is not the only company developing 1550nm VCSELs. Bandwidth9 Inc. and Nortel/CoreTek are the major players in this area. In addition, Siros expects to be competing against companies that produce edge-emitting lasers.

RHK Inc. analyst Vladimir Kozlov says that while competition is definitely tight, with many companies racing to produce the same components, companies taking a different approach might have an opening. While he, too, is being kept in the dark regarding Siros’s new technology, he believes the company has potential.

“Something is going to change,” Kozlov says. “Companies like Siros that are coming up with something new and potentially valuable could be beneficiaries… The new funding, for me, means that they have really good technology.”

Apparently, their investors agree. New investor Austin Ventures led this round of financing. In addition to Austin, two other new entrants, Applied Materials Ventures and Vortex Ventures Inc., participated in the round, along with existing investors such as New Enterprise Associates (NEA), New Venture Partners, CMEA Ventures, Citigroup, Parker Price Venture Capital Inc., Milepost Ventures, and Lowenthal Capital. Siros has received a total of $32 million in funding to date. It closed the first round of financing for this technology in mid-2000.

Siros promises to reveal more about both the company’s technology and its customers over the next couple of months.

— Eugénie Larson, Reporter, and Pauline Rigby, Senior Editor, Light Reading
http://www.lightreading.com