Monday April 10, 2:43 pm Eastern Time
Forbes.com
Zaffire Hangs Its Optical Networking Shingle
By John Shinal
Zaffire, a San Jose, Calif.-based startup which makes optical networking equipment, will officially throw its hat into a crowded ring later this month when it announces its second funding round and the first trials of its equipment.
Founded in 1998 in Santa Barbara as New Access Communications, the company moved to Silicon Valley and changed its name last year at the urging of Vinod Khosla, general partner with the venture capital firm Kleiner Perkins Caufield & Byers.
Khosla, who reaped huge returns in 1999 from investments in Juniper Networks (Nasdaq: JNPR - news) and Cerent (an optical startup bought by Cisco), got involved with Zaffire after its product won an award at the SuperComm trade show in Atlanta last June.
``Zaffire was just twelve guys and a box then,' says its president and chief executive Tony Lavia. ``Now we've got 100 people and are hiring 25 a month.'
The company is developing equipment known as wavelength division multiplexers (WDMs), which expand the capacity of phone networks by splitting beams of light carried on fiber optic cables into multiple wavelengths, or channels.
Zaffire's secret sauce is its ``fractional wavelength' technology, which Lavia says allows one channel to carry multiple streams of data traffic simultaneously. It also can spread a single large data transmission over multiple wavelengths, he says.
Large Internet service providers such as MCI WorldCom (Nasdaq: WCOM - news), Qwest Communications International (NYSE: Q - news) and Williams Communications (NYSE: WCG - news) are on the hunt for WDM gear to help them move larger amounts of data traffic.
Zaffire's gear is designed for densely wired metropolitan areas. The nascent market for this so-called Metro WDM gear has attracted lots of attention from big equipment makers because it's expected to explode to several billion dollars annually within five years. ``There are a lot of players already in this space,' says Brendan Hannigan, an analyst with Forrester Research.
Zaffire's rivals will include newly public companies such as Sycamore Networks (Nasdaq: SCMR - news) and startup Optical Networks, which recently filed to go public. Nortel Networks (NYSE: NT - news) is also developing a Metro WDM box based on technology it acquired when it bought Cambrian Systems last year.
Zaffire's management includes former executives of Newbridge Networks (NYSE: NN - news), StrataCom (bought by Cisco in 1997) and Fore Systems (bought by British phone-equipment maker GEC last year).
Lavia said the latest financing round brings the company's total funding to more than $25 million. He wouldn't comment directly on who is testing Zaffire's gear, but admitted that large upstart service providers like Williams and Qwest are the types of customers Zaffire is targeting. Both Williams and Juniper have invested in Zaffire. |
