Zepton: Take Me to Your Leaders

Normal formula for a healthy startup: The right backers, some well-known executives, loads of cash, and some interesting technology.

Zepton Networks Inc., a new stealthy startup, has at least three out of the four covered. For the fourth element-- technology -- it's too early to tell.

Before he went on sabbatical this spring, Vinod Khosla, of Kleiner Perkins Caufield & Byers, helped Zepton with its first round of funding, worth $50 million in cash. Two other top venture firms, Accel Partners and Benchmark Capital, also participated in the round.

“We were able to close the round in the beginning of April when the market was really tanking,” says David Welch, founder and one of the company’s two chief technology officers. “It’s a real testament to what we are doing here that we can raise that kind of money in a climate like this.”

But Zepton has more than cash and top-drawer VCs going for it. It also has a strong executive pedigree. Jagdeep Singh, founder and CEO of the company, is known in optical networking circles for helping found Lightera Networks, which was sold to Ciena Corp. (Nasdaq: CIEN) for 21 million shares back in 1999. And just last year, he founded a metropolitan area service provider company called OnFiber Communications Inc., another Khosla startup.

The rest of the team is a combination of people that had worked with Singh on his two previous companies and individuals from big-name component and software companies. Drew Perkins, the other chief technical officer and a founder of Zepton, followed Singh from his two previous startups where he served as the CTO for OnFiber and helped found Lightera.

Welch was vice president of corporate development for SDL Inc. and JDS Uniphase Inc. (Nasdaq: JDSU; Toronto: JDU), where he was in charge of technology and acquisition strategies. While serving in this position, he helped orchestrate one of the biggest technology mergers in history, the $41 billion acquisition of SDL by JDS Uniphase.

Fred Kish, vice president of development and manufacturing joined Zepton Networks from Agilent Technologies Inc. (NYSE: A). At Agilent, he was R&D and manufacturing department manager of an optoelectronic device organization for Agilent's fiber-optics business. And then there is Sudhanshu Verma, vice president of software engineering who joined the company from Visual Networks where he was vice president of engineering.

Company executives have been very tight-lipped about specific product plans. In an interview with Light Reading, Welch and Perkins rephrased the vague company description found on the company’s Website, which basically describes some generic optical networking plans.

“We can’t go into too much detail,” says Welch. “But we are drawing on systems- and component-level expertise to deliver a product that will revolutionize optical networking”

When pressed for further details about whether they were working on a component company or a systems product Welch joked: “Let’s just say it’s bigger than a wafer and smaller than a central office.”

But the last laugh could be on Zepton. The last company with a futuristic name beginning with a "Z" funded by Kleiner Perkins, Zephion, met a brutal ending. Zephion, an optical service provider created in an attempt to salvage ailing BroadBand Office Inc., was suddenly shut down last month (see Zephion: Anatomy of a Debacle).

- Marguerite Reardon, Senior Editor, Light Reading

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Light2001 12/4/2012 | 8:10:35 PM
re: Zepton: Take Me to Your Leaders Judging from the web site, and people that they're interested in hiring, it's a good bet that the product will be a sub-system product--They need some software, but not too much software. So the box they are building will be smaller than a rack, but larger than a butterfly.
myresearch 12/4/2012 | 8:10:33 PM
re: Zepton: Take Me to Your Leaders They are building a subsystem for fiber-to-home system that will be substantially cheaper ...

Leviathan 12/4/2012 | 8:10:33 PM
re: Zepton: Take Me to Your Leaders
In this market, every dogbox has "scored" $XX million in VC, and is in some form of "secret development." Who cares? The days of good-ideas-as-good-enough are over, HELLOOOO. Now try and EXECUTE, you goddamn freaks.

These silly ego releases are sooo 1999. Hopefully you'll wake up and smell your own hubris while you hike the ocean and swim the canyon on your goddamn "sabbatical."
Two 12/4/2012 | 8:10:27 PM
re: Zepton: Take Me to Your Leaders
Just remember, one of his previous startups (Lightera, another Vinod production) spawned the CIENA CoreDirector -- a hugely successful product.

This team is outstandingly talented -- you shouldn't discount them so easily.

bear 12/4/2012 | 8:10:27 PM
re: Zepton: Take Me to Your Leaders These guys started OnFiber just last year! Seasoned management?! Try seasoned flakes! They have jumped from one start-up to another. It's going to take a lot more than Welch, Singh, and Co. to pull this one off. I can't believe Khosla would back these guys - again!
opticalnutjob 12/4/2012 | 8:10:25 PM
re: Zepton: Take Me to Your Leaders leviathan-
how can you say that? vinod is the greatest vc/visionary of all time. he's a genius that doesn't need to worry about execution because his mere involvement will give the company at least a $6 billion valuation. mark my words, zeption will be vinod's most briliant scam ever. you put too much emphasis on execution.... wake up this is the year 2000!
jaguar1956 12/4/2012 | 8:10:23 PM
re: Zepton: Take Me to Your Leaders maybe in 2000 that thinking would be okay; not in 2001
Half-Inch Stud 12/4/2012 | 8:10:20 PM
re: Zepton: Take Me to Your Leaders ...By combining the Market Definition & the people skills involved, with the total lack of product definition; sounds to me like they are going to claim brilliance by integrating optical waveguides within a circuitboard.

Doubtful the VCs were shown the production ramp-up plan, with yielded output! How about sell-price and Net Margins.

There are two types of execution that come to light...Just follow the history trail, or look at the market acceptance of competing approaches.

Hmmm, taste like Kaluha in my coffee.
flanker 12/4/2012 | 8:10:20 PM
re: Zepton: Take Me to Your Leaders "his mere involvement will give the company at least a $6 billion valuation."

OK, name one, just one company, with no revenues and a $6 billion valuation today.

I didnt say two, just one.

shredj 12/4/2012 | 8:10:16 PM
re: Zepton: Take Me to Your Leaders Cut me a break! Cheaper, faster better, sounds like the dsl story.
Who cares?
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