Could Nortel do the sameCalient nabs $225 million in financing
January 08, 2001 12:00 AM PT
by Rex Crum
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The year is young, but already a contender has emerged to claim the title of largest venture capital round for 2001.
San Jose, Calif.-based Calient Networks, which makes photonic switching systems for telecommunications carriers, today announced it has closed $225 million in a third-round of financing. The funding for the privately held company consists of $195 million in equity investment and lease commitments of up to $30 million.
Since it was founded in March 1999, Calient has secured $281 million in financing. BlueStream Ventures led the current round of funding and was joined by several other companies including networking equipment firms Juniper Networks (JNPR), Tellabs (TLAB) and Marconi (MONI). As part of Juniper's involvement, Scott Kriens, Juniper's chief executive officer and president, will join Calient's board of directors.
Photonic switches are considered to be crucial parts of optical networks in the coming years. The technology uses light, instead of electrical signals, to send traffic along networks, and is expected to reduce the costs of transmitting data and maintaining networks.
"There's an insatiable demand for bandwidth," said Tim Dixon, Calient's vice president of marketing. "This is like jumping from a regular highway to a Formula One racetrack."
Estimates of the value of the optical switching market vary. Dixon said Calient has gauged that the market will be worth $4.5 billion, by 2005, while research firm Ryan, Hankin and Kent has said the optical networking space could reach as high as $40 billion by 2003.
Terry Gibson, Calient's chief financial officer, said the company is currently testing its products and expects to begin generating revenue from the devices later this year.