Phaethon Communications closes $22.1 million Series B funding

Mar. 7, 2001--Phaethon Communications, a provider of photonics technology, announced it has closed a Series B investment round totaling $22.1 million, led by The Goldman Sachs Group Inc. and its affiliates along with Cisco Systems Inc., Mohr, Davidow Ventures (MDV) and The Photonics Fund.

Phaethon Communications, a provider of photonics technology, announced it has closed a Series B investment round totaling $22.1 million, led by The Goldman Sachs Group Inc. and its affiliates along with Cisco Systems Inc., Mohr, Davidow Ventures (MDV) and The Photonics Fund. Phaethon plans to use this capital to increase its investment in engineering, sales and marketing and to build manufacturing facilities.

Phaethon is addressing the problem of dispersion, or the degradation of optical signals as they traverse fiber - a technical challenge that is a problem at OC-192 (10 Gbps) speeds and severe in OC-768 (40 Gbps) networks. Dispersion is a fundamental property of light signals in which waveforms broaden over long distances, making the signals difficult to interpret by the time they reach receivers at the end of a fiber span. Phaethon is developing a comprehensive suite of tunable, multichannel dispersion compensation modules that fix all kinds of dispersion in any kind of optical fiber. As such, Phaethon is seen as a gatekeeper to OC-768 migration, a position of considerable excitement for the company's investors.

Goldman Sachs, a global investment banking and securities firm, strongly complements the expertise of Phaethon's other investors. Cisco Systems, a provider of networking for the Internet, has a strong investment track record in the communications industry, including investments in the optical networking space. Mohr, Davidow Ventures and The Photonics Fund, Phaethon's first-round investors who returned for the Series B funding, will continue to add their management and operations expertise to the company. Mohr, Davidow Ventures, an early-stage venture capital firm, has a history of investments in optical and photonics-related companies, including Brocade, ONI Systems, nLight Photonics, Trillium Photonics, Lantern Communications and Quake Technologies. The Photonics Fund, which specializes in early-stage investments in optical components, modules and systems, includes in its portfolio ONI Systems, AXSUN Technologies, Kestrel Solutions, K2 Optronics and Tsunami Optics.

About Phaethon Communications:

Phaethon Communications is developing a family of tunable, multichannel modules to address optical dispersion in both OC-192 and next-generation OC-768 networks. Phaethon's feature-rich dispersion management modules counteract the inevitable degradation of high-speed light signals as they traverse optical fiber, so that communications network providers can send signals farther, faster, over more channels.

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