Simplicity And Low Cost Lure VCs To Networking Startups

Optical-networking vendors whose products reduce the complexity and cost of extremely high-capacity fiber-optic lines drew venture money last week.

Polaris Networks of San Jose, Calif., received $52 million from lead investor Advanced Technology Ventures and nearly a dozen new and previous backers. It provides equipment for high-speed metro area networks, combining signal transport and switching. "As a result, carriers have a significant benefit," including lower capital expenditures and operational costs, says Sab Gosal, Polaris' director of product marketing. The products are in final development, and Polaris plans to ship its first offerings in the fourth quarter.

Alphion, in Eatontown, N.J., got $15 million in a second round led by Goldman Sachs and Tallwood Venture Capital. The company plans a second-half-of-2002 launch of its indium arsenide semiconductor technology, which simplifies optical networking equipment by eliminating the need for optical-to-electronic translation.