VIPswitch has closed its doors, Light Reading has learned. The company was making a terabit edge switch for Ethernet service providers. It was a competitor to Force10 Networks Inc., Lantern Communications Inc., Extreme Networks Inc. (Nasdaq: EXTR), and Riverstone Networks Inc. (Nasdaq: RSTN), according to information from its main investor, Technocap (see Optical Ethernet Angst).

VIPswitch apparently was not able to secure any significant funding since the $15 million round it announced in April 2000. The company's investors included Technocap, Innovatech Grand Montreal, and Davenport Ventures. The company employed 80 people (see Don Gibbs).

Officials from VIPswitch did not return calls for this article.

Village Networks, makers of an MPLS-based optical edge system, went through "significant downsizing" last week, and may need some quick deals before it's forced to close up shop.

A spokesperson confirmed the layoff, but wouldn't say exactly how many took leave. Kai Eng, founder, president, and CEO, declined to comment for this article. He sent this message through a spokesperson, via email: "Village Networks is involved in ongoing discussions with major service providers in Asia. We are hoping that these discussions will help fuel the company and its future success." Translation: If customers don't bite soon, it is all over.

Eng founded Village in 1998 (see Village Networks and Village Unveils "Optical Packet Node"). Later, it ran into some trouble (see Village Stung by Employee Arrest and Atoga, Village Networks Scale Back). The company had raised $50 million in venture capital funding to date, plus a couple of bridge loans. Spectrum Equity Investors, Geocapital Partners, Acappella Ventures, Capital Associates, Global Crossing Ventures, The Goldman Sachs & Co., Intel Capital, and PCG Ventures helped fund the company.

Vivace Networks looks to be running low on funds. The MPLS switch maker launched in July 1999. Sometime late last year, according to several sources, it began to run low on funds and fired between 20 percent and 30 percent of its staff (see Looking Glass Sees $275M Round). The company employed 140 people in December 2001, according to information it supplied to Dun & Bradstreet.

The company announced its most recent funding round of $83 million in October 2000 (see Vivace Raises $83M Third Round). At that time, the company had raised a total of $118 million from several investors including Sutter Hill Ventures, Foundation Capital, Brentwood Venture Capital, Institutional Venture Partners, Redpoint Ventures, Meritech Capital Partners, Putnam Investment Management Inc., and J.P. Morgan & Co.

Now Vivace has mysteriously declared itself to be in "stealth mode" and has taken down all information about itself from its Website. It's also employing a professional PR agency to return reporters' calls and initially declined to comment for publication.

Vivace CEO Ken Koenig, however, finally emailed to say that the rumors about Vivace's troubles are groundless: "Vivace is in a healthy cash position. We still have more cash in the bank than some of our peers have recently raised." The company will divulge more details at Supercomm, he says.