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28 February 2007


Infinera files for IPO to raise up to $150m

Infinera Corp of Sunnyvale, CA, USA has filed with the Securities and Exchange Commission for an initial public offering on the Nasdaq Global Market of up to $150m in common stock. It will use the proceeds for working capital and other general corporate purposes, as well as repaying its credit facilities or acquiring other businesses.

Infinera was founded in early 2001 as Zepton Networks Inc and has since raised over $330m in venture capital funding. Investors include Advanced Equities, Kleiner Perkins Caufield & Byers, Mobius Venture Capital, RWI Ventures, Benchmark Capital, Applied Materials Ventures, Cypress Semiconductor, Sprout Group, Venrock Associates, Worldview Technology Partners, Siebel Systems and Sutter Hill Ventures.

Infinera claims to have created the only commercially deployed, large-scale photonic integrated circuit. Its PICs incorporate the functionality of over 60 discrete optical components into a pair of InP chips, and are designed for communications, military and sensing applications, including transmitting and receiving at data rates of up to 100Gbit/s in fiber-optic networks.

Infinera uses the PIC technology in its DTN digital optical networking system, which enables optical-to-electrical-to-optical conversion of signals and provides operating simplicity, enhanced revenue generation, faster time-to-service, and capital cost savings, the firm claims.

Since November 2004, Infinera has been shipping the DTN system to telecoms carriers, cable operators and other service providers as well as distributed enterprises as the key element in long-haul and metro-optical transport networks. It is deployed by 25 customers, including Internet2, Interoute, Level 3 Communications, and Qwest Communications. Infinera claims to have had the largest market share of 10Gbit/s long-haul ports shipped since Q3/2005.

Infinera’s revenue has risen from $0.6m in 2004 and $4.1m in 2005 to $58.7m in 2006 (including $44.3m in Q4). Level 3 accounted for 60% of revenue in 2006. However, losses (which were $66.4m in 2004 and $64.6m in 2005) also rose to $89.1m in 2006.

* In mid-February, to add additional technology to its Digital Optical Networking architecture, Infinera acquired University of Maryland spin-off Little Optics Inc of Annapolis Junction, MD, USA, which was founded in 2000 by Brent Little and John Hryniewicz of the University of Maryland’s Lab for Physical Sciences and acquired in November 2005 by ICX Nomadics of Stillwater, OK, which creates explosives detection systems for homeland security.

Funded by the Department of Defense, Little Optics has developed integrated optical devices using planar lightwave circuit (PLC) technology and proprietary glass materials to deliver photonic integration that is designed to be superior to traditional PLC technology. The firm’s passive integration techniques are in the development stage, and complement Infinera's active large-scale InP-based PICs. Infinera intends to combine its PIC technology with Little Optics' Hydex glass-based substrate and VLSI photonics platform.

“The Infinera DTN system is designed to deliver significant benefits to customers in terms of size, weight, power consumption, and scalability. Integration has enabled Infinera to develop the digital architecture which is designed to be more flexible, simpler, and quicker to deploy,” says chief marketing & strategy officer Dave Welch. “When integrated into our product, we believe that Little Optics' technology will bring new capabilities and significant benefits to our photonic integrated circuits and will enable us to enhance the features and capabilities of our Digital Optical Networks.”

Little Optics has a 35,000ft2 facility, including a 4000ft2 cleanroom for wafer fabrication. Infinera is merging the Little Optics team of 22 staff with its existing engineering team in Annapolis Junction.