BRITISH FIBEROPTICS MARKET: Fiberoptics startup attracts $55 million

A new company has attracted first-round funding of $55 million from US and UK sources. Southampton Photonics (Southampton, England), which has its roots in the Optoelectronics Research Centre (ORC) at the University of Southampton, will design and manufacture fiberoptic components for the global telecommunications market. It plans to create 200 high-technology jobs in the UK (at Chilworth Science Park, Southampton) during the next 18 months and 250 in the USA (in Los Gatos, CA) by the end of 2002.

The ORC is world-renowned for developing technologies critical to communications networks. The founder and chairman of Southampton Photonics is David Payne, the head of the ORC. Payne led the team that invented the optical amplifier, the enabling technology behind dense wavelength-division multiplexing (DWDM), in 1986 and was jointly awarded the Benjamin Franklin Medal for developing the erbium-doped fiber amplifier in 1998.

Southampton Photonics will base its initial products on technology licensed from the University of Southampton and will benefit from an on-going alliance with the ORC. The planned products can be divided broadly into three categories: distributed-feedback fiber laser arrays that will provide closely packed channels for DWDM optical filters with enhanced performance allowing more channels per optical fiber and broadband optical amplifiers. It is anticipated that all of these will exhibit performance parameters an order of magnitude better than the current alternatives.

In addition to its significant in-house product- and technology-development efforts, the company will continue to license key know-how and further patent portfolios from the ORC. Payne commented, "We have an immensely strong team of world-class photonics technologists in the company, matched by a highly experienced management team with US focus. Between us we have more than 100 years of experience at the top of the optical telecommunication field. For this reason, we have attracted an outstanding set of investors from the USA and the UK and a record level of first-round funding."

The major investors in Southampton Photonics include Quantum Technology Partners—a Silicon Valley-based investment company formed especially for the purpose of investing in the company—Interwest Partners, and Sevin Rosen. The latter two are both US-based, and their previous investments included Ciena, a pioneering company in the DWDM optical networking industry, and Amadeus Capital Partners, the UK-based technology-investment company. Other investors include Marsh & McLennan Capital and the University of Southampton.

Key appointments in the startup include Don Spalinger as president. He was previously managing vice president/practice leader of worldwide telecommunications research at the Gartner Group and was founder and president of On-Stream Networking, acquired by 3Com as its Broadband Access Division. Also on-board is Peter Ballantyne, previously with Bookham Technology.

Spalinger explained, "We are happy to be manufacturing at Southampton as we have had all kinds of support from the university. The key to Southampton Photonics is the product range, which has been developed in the UK. However, the near- and mid-term markets are defined by user companies in the USA. And so the business needs to be transatlantic."