Internet Photonics Raises $31M More

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Internet Photonics has closed a third round of venture-capital fundraising, adding $31 million to its coffers.

The optical Ethernet-transport company has now raised $63 million since October 2000. New investors ComVentures and Telesoft Partners joined previous backers Sprout Group and New Venture Partners LLC.

Internet Photonics provides gigabit Ethernet and dense wave-division multiplexing (DWDM) technology, which one major MSO is using for its VOD rollouts. That MSO is believed to be Comcast Corp.

Internet Photonics vice president of marketing Gary Southwell declined to name the MSO, but said the operator has deployed the company's technology in more than 10 markets. That MSO is using centralized storage for a massive VOD-content library.

"They needed to have a highly reliable, high-capacity transport network," he said.

Internet Photonics is providing the MSO with the gigabit Ethernet interfaces that link up with the video server. It has an integration deal with SeaChange International Inc. right now, and a pact with a second server vendor is in the offing, he said.

Internet Photonics also is selling the MSO anywhere from one to several wavelengths of DWDM transport, Southwell said.

"We can take 8 gigabits in a single wavelength," he said.

The DWDM wavelength runs from the headend to the nodes, where the VOD signal interfaces with QAM devices. For the moment, only one wavelength is needed, but more can be added depending on VOD traffic patterns, Southwell said.

Southwell said the Internet Photonics technology costs about $30 per stream.

Revenue from the cable business and the third-round funding should take the company to cash-flow positive by mid 2003, he said.

The new backers were impressed with Internet Photonics, said Southwell, because "it's the next-generation transport network that's built to price points that the cable industry demands."

Southwell said the company is in certification testing with two other MSOs. It also sells its products to local and long-distance phone companies.

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