A start-up that claims its technology is superior to Cerent’s - the optical internetworking company that Cisco bought last week - said on Monday that venture capitalists had poured a total of $47 million into it.
Cisco paid $6.9 billion for two year old Cerent last week, although it generated revenues of only $10 million for the first six months of this year. But John Chambers, Cisco’s chief executive, justified the extraordinarily high multiple by saying: "Anyone who follows our market knows that optical transport is going to explode. This is how the industry is going to evolve."
But one year old Cyras Systems will use its cash to continue the development of technology that enables the transmission of voice and data over optical fibre cable, although it has yet to bring any products to market.
Doug Carlisle, a general partner at Menlo Ventures, one of the venture capital firms backing it, said the start-up "shows tremendous promise in defining a new category of switching technology for multiservice bandwidth optimisation of optical networks."
He claimed that even if the firm’s technology was not redesigned, it would still have eight times the capacity of Cerent's and would initially move data at 10 Gbps, although this would double to 20 Gbps "in the near future." Cerent's switches transmit data at 2.5 Gbps today, but it is also developing new products, and both companies’ offerings are aimed at telephone companies and Internet Service Providers.
Rafat Pirzada, one of Cyras’ founders added: "We've been extremely successful in building advanced high speed switching solutions that are both scalable and flexible. We expect that once launched, our products will change the face of the data over optics marketplace."
Cyras was founded last year by four engineers from India, who worked for industry giants such as Cisco, Sprint and Sun Microsystems. In true Silicon Valley tradition, the company was started in the garage of one of the founders, but quickly expanded to facilities in Fremont, California, as it raised its first $18 million of financing.
Market researchers estimate the optical transport market will be worth $10 billion by 2002.
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