Xtera Nabs Metro-Optix Assets
The possibility of such a move first surfaced on Light Reading two weeks ago, as Xtera reported $30 million in new funding (see Xtera Scores Surprise $30M). Xtera CFO Chris Ryan says the potential deal didn't affect the funding round. "Nothing was contingent... Funding closed before [the deal was done]," he says. But he acknowledges the round is still open, which leaves the door ajar for additional investors now that the arrangement is final.
According to Kris Shankar, a former Metro-Optix exec who is now VP of marketing and business development at Xtera, the agreement addresses a serious problem facing Xtera -- the delays and carrier pull-backs in spending that have devastated other long-haul startups (see Ceyba Shuts Down and Ex-PhotonEx? ). The acquisition gives the company a shorter-range set of prospects.
Xtera's sticking to its original product plans, says Shankar, but long-haul gear requires long sales cycles. Meanwhile, Metro-Optix already had 15 customers and 18 lab trials, and Shankar says it even sold gear during its time in limbo.
"We have loyal customers. We had half a million dollars in sales during our shutdown," Shankar boasts. After taking the reins from Dave Orr, CEO at the time of Metro-Optix's closure, he asked the company's customers to wait the eight to ten weeks needed to close a deal with an acquirer before moving on, and, he says, they stayed. Several companies expressed interest in Metro-Optix, but Shankar's team felt Xtera was the best match.
Shankar is one of about 15 employees left at Metro-Optix. It's not clear how many of those, which include engineers, contract workers, and support personnel, will remain. "It will probably take a month to two for the final number to be determined."
Meanwhile, Shankar says the goal is to integrate Metro-Optix into Xtera with "no more than a hiccup." He's moved into Xtera's Allen, Texas, headquarters and seems optimistic about the future.
The way ahead won't be easy. At least one other long-haul startup, Innovance Networks, is bent on staying in the game as well. It's likely to produce some tough competition for Xtera in a fragile, tiny market.
— Mary Jander, Senior Editor, Light Reading