Four Optical Startups with One Common Thread

Last week, four optical startups debuted that all share a common heritage: they were all conceived and will be nurtured by the same two people.

One such startup is Iris Labs, which will serve as a sort of technical and operational holding company for three others building optical networking gear for the access/metro, backbone and core marketplaces. The companies will share a single network management strategy in an effort to address carriers' concerns about provisioning services across incompatible multivendor systems.

Collectively, the group of startups is called the Iris Group.

All four startups were founded by former Monterey Networks cofounders Michael Zadikian and Zareh Baghdasarian. Monterey is the wavelength router company acquired by Cisco earlier this year for $500 million.

Iris Labs defines the overall architecture and network management strategy for the companies, and provides the other start-ups with legal, accounting and human resources expertise. It will license its technology to Iris Group start-ups and non-Iris Group companies.

The other startups are Metera Networks, which develops access/metro-area optical systems; Latus Lightworks, which is developing optical backbone systems; and Coree Networks, which is working on core optical networking products.

This original group will expand in the future by bringing in additional, complementary startups. And though they will adhere to a common network architecture and network management strategy, the Iris member companies will belegally separate entities with distinct corporate and financial structures, company officials say.

Before year-end, the four startups expect to raise first-round funding totaling more than US$100 million. To date, three of the companies have completed their first rounds of funding: Iris Labs for $7.5 million, Metera Networks for $24 million and Latus Lightworks for $28.1 million.

Funding was provided by Mayfield Fund; Sevin Rosen Funds; Weiss, Peck and Greer Venture Partners; and Hook Partners. Coree expects to close its first-round funding later this year.

Metera's product, to be introduced in 2001, is designed to allow service providers to deliver differentiated optical data services to customers along with associated traffic and network management capabilities. Latus Lightworks is developing optical networking products intended to enable carriers to build packet-optimized, differentiated long-haul transport networks. Initial products will be introduced in 2001.

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