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Intune Gets $18M For Optical Burst Switching

After spending eight years waiting for the telecommunications market to pick up, networking equipment developer Intune Networks Ltd. believes the timing may finally be right for it. The company has taken in $17.75 million in Series A funding to develop its technology, which it hopes will provide broadband-hungry telecoms more bandwidth flexibility.

The round came from a consortium of new investors - Amadeus Capital Partners, Spark Capital and Balderton Capital, formerly Benchmark Capital Europe. In 1999, the company raised $2.7 million from 3i Group PLC, ICC Venture Capital and angel investors. 3i's share was bought out by the angel investors last year, and HBOS PLC inherited ICC's stake via acquisition.

Enterprise Ireland is also an investor, said John Dunne, the company's chief marketing officer. Although the company is calling the new financing a Series A round, Dunne said it wasn't a recapitalization. Now that telecom companies are making large capital investments to keep up with the growing demand for bandwidth, Dublin-based Intune Networks is expanding its product development capabilities.

Intune has been shipping networking switches for enterprise and metro networks based on its tunable laser technology since 1999. Now the company is looking to develop optical burst switching products based on the same core technology that will eliminate guesswork by telecoms on how much bandwidth they will need on a given area of the network, Dunne said. Anticipating bandwidth needs has become an increasingly difficult task because of the explosion of high-bandwidth Internet-related traffic over the last few years.

The company is developing optical switches that can tune laser light to multiple colors, allowing telecom companies to increase bandwidth when needed, Dunne said. The company hopes to have some of these products on the market in the next year, Dunne said. The company revved up its growth last August when it hired Tim Fritzley, a former executive of Microsoft Corp.'s Internet protocol TV division, as chief executive. Since then, it has doubled its employee count from 15, and expects to have some 50 employees within the next year, Dunne said.

"The whole idea of switched optical rings has been kind of a holy grail. Now it looks like we might have technology that helps us crack that problem," said George Coelho, a general partner with Balderton Capital. Intune Networks is not the only venture-backed company to pursue this "holy grail."

Mountain View, Calif.-based Matisse Networks Inc. is also producing optical burst switching products. That company received a $21.5 million Series A round from Menlo Ventures, Walden International and Woodside Fund in 2003.

Coelho of Balderton, Todd Dagres, a general partner at Spark Capital, and Simon Cornwell, a partner with Amadeus Capital, will take seats on the company's board.