Yahoo article on Jetstream:
biz.yahoo.com
Forbes.com
Five Startups To Watch
By John Shinal
Few investor conferences geared toward privately held companies can match the alumni list
of the Network Outlook event hosted every March by the research firm Technologic
Partners in San Francisco. The gathering gives 100 of the most promising technology
companies the chance to pitch their stories to an audience of venture capitalists, money
managers and other investors.
Many of the most-successful, newly public companies--including Juniper Networks
(Nasdaq: JNPR - news), Redback Networks (Nasdaq: RBAK - news), Akamai
Technologies (Nasdaq: AKAM - news), Brocade Communications (Nasdaq: BRCD -
news) and Sycamore Networks (Nasdaq: SCMR - news)--have been presenters at previous conferences. With that track
record, it's worth taking a look at the companies that were among those voted most likely to succeed at Network Outlook
2000.
Perhaps the best known of this year's crop is Corvis, a Columbia, Md.-based maker of optical networking switches. One of
the company's most important assets is the track record of its founder, David Huber. Earlier this decade, Huber founded
Ciena (Nasdaq: CIEN - news), which pioneered a new optical technology known as wavelength division multiplexing (WDM)
and used in nearly every telecommunications network.
Huber says that Corvis is the first equipment vendor whose switches are entirely optical, with no electronic components. That
makes them faster and easier to maintain than current offerings from Ciena, Cisco Systems (Nasdaq: CSCO - news), Nortel
Networks (NYSE: NT - news) and Lucent Technologies (NYSE: LU - news).
Corvis made headlines late last year when Cisco, one of the earliest Corvis investors, considered buying the company before
it decided to instead buy the WDM unit of Pirelli. Corvis promptly went out and raised another huge chunk of money, bringing
its total financing to $300 million. ``We took our last venture round to scale our manufacturing,' says Huber, who declined to
provide specifics on when the company plans to go public.
Ironically, some analysts think Corvis' technology may be too far ahead of its market, but with several service providers
already testing its equipment, the company is likely to end up with either a huge IPO or a lucrative buyout.
Another Network Outlook 2000 was Equinix, based in Redwood City, Calif. The company, which has raised $292 million in
private financing since its founding in 1998, is building a global network of what it calls Internet business exchanges. The
exchanges provide services like Web hosting, digital subscriber line (DSL) access and e-mail to Internet service providers.
Its carrier-neutral model makes it easy for application service providers to acquire just the right amount of network capacity
they need to set up shop. ``Equinix is already doing what Exodus (Communications) and others are trying to do,' says Neal
Dempsey, general partner with the venture firm Bay Partners, which has no investment in Equinix. ``I wish we did' invest in
them, he says.
In addition to a respected business plan, the company has the right connections. Its board members include Andrew Rachleff
of Benchmark Capital, among the first venture firms to invest in eBay (Nasdaq: EBAY - news) and CacheFlow (Nasdaq:
CFLO - news) and Mike Volpi, senior vice president and top dealmaker for Cisco.
CopperCom, whose DSL products let service providers offer both voice and data services over the same line, is targeting a
market that most analysts say is set to explode. The company, which has raised $64 million since its founding in 1997, already
has several high-profile customers, including Lucent.
This week, CopperCom pulled off a rare feat when it agreed to acquire DTI Networks, another startup with related
technology. ``That was a bold move. With that acquisition, they have the potential to grab the leadership position in an
emerging market,' says David Hanna, chairman of Hanna Capital Management.
Because voice over DSL revenue is expected to surge, there may be room for another player in the market targeted by
CopperCom. Jetstream Communications, another maker of DSL voice equipment, has raised $68 million and is contemplating
an IPO for later this year, says its chief executive, Sundi Sundaresh
CoSine Communications is building a new type of communications switch that makes it easy for carriers to add new services.
Founded in 1997 by Dean Hamilton, the former head of the carrier signaling unit of Ascend Communications, CoSine has
raised $92 million. The company, whose networking equipment has the speed and reliability of a powerful computer, already
employs 250 workers and is testing its product with Qwest Communications (NYSE: Q - news). Hamilton says the company
plans an initial public offering in the third or fourth quarter of 2000.
Other promising startups presenting at the show included Taqua Systems and Tachion Networks, which are building new
phone switches with more features than the much more expensive rival products from Lucent and Nortel; Tellium, another
maker of optical gear, and Broadband Access Systems, whose equipment will let cable companies provide Internet access
and voice calling.
A list of favorites, by funding level
Name
Funding
Employees
Corvis
$300 million
300
Equinix
$292 million
150
CoSine
$92 million
255
Tellium
$85 million
125
Broadband Access Systems
$71 million
100
Jetstream Communications
$68 million
140
CopperCom
$64 million
150
Tachion
$34 million
100
Taqua
$15 million
125 |
