Capella seeks expansion via latest funding round

Wavelength-selective switch (WSS) vendor Capella Intelligent Subsystems CEO Larry Schwerin tells Lightwave that the $20 million his company raised in its latest funding round shows Capella is “in the right place at the right time” to expand its WSS business and shed the start-up label.

Existing investor Black Diamond Ventures led the oversubscribed round; Schwerin predicted in a conversation with Lightwave that the round will be the last his WSS company will require before it becomes self-sufficient. Capella’s other existing investors, including Levensohn Partners, Formative Ventures, Lucas Venture Group, Rustic Canyon Ventures, and Saints Capital, participated as well.

Capella also welcomed a new investor, SingTel Innov8, the corporate venture arm of the SingTel Group. Schwerin said SingTel, Singapore’s national carrier, sees the investment as a way of tracking enabling technologies that will help it expand its network capabilities. Beyond the cash infusion, Capella will benefit from the visibility SingTel will provide into fiber-optic network requirements, Schwerin said.

Christopher B. Lucas, founder and managing director of Black Diamond Ventures, told Lightwave that the markets generally proved welcoming for the round, as its oversubscribed status attests. He described the WSS and reconfigurable optical add/drop multiplexer (ROADM) space as the hottest in optics from an investment perspective.

Schwerin said he plans to use the money to scale operationally to produce more WSSs (the company uses Fabrinet as its contract manufacturer) as well as develop new products. High-port-count offerings along the lines of 1x20 WSS modules represent a near-term goal, as do other means to support colorless, directionless, and contentionless ROADMs. However, Schwerin indicated that the company awaits a clearer set of requirements from its customers, particularly in terms of preferred implementation schemes, before it moves forward with a new generation of products for such applications.

Capella undoubtedly will continue to leverage its ability to provide wavelength tracking and performance monitoring in whatever products come next. While both Finisar and Oclaro have reported a short-term weakening in ROADM subsystem demand (see "How long will the optical communications correction last?"), Schwerin says Capella has avoided a similar downturn.

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