Fresh Money for New Materials

This week, the venture capital was flowing to startups claiming to have new approaches to optical components using materials such as ceramics and polymers.

Yesterday, Continuum Photonics Inc. announced that it had raised $14 million to develop a new material for optical switches, bringing its total funding to about $16 million.

The round was led by new investors Flagship Ventures, and Prism Venture Partners, with Harris & Harris also participating. Seed investors Massachusetts Technology Development Corporation (MTDC), Gainesborough LLC, and private individuals also took part.

Continuum is in stealth mode and won't have a product out until the end of the year, according to Aaron Bent, its founder and executive VP of business development. With barely a pause, he went on to explain that the switch is based around an electroactive or so-called "smart" ceramic material -- which changes shape when a voltage is applied -- and on silicon micromachining.

"It's not 2D or 3D MEMS [micro-electro-mechanical system], or a planar lightwave circuit," he says. "What it is, is something we believe will be disruptive in terms of price point, loss characteristics, and -- a third thing that many people forget until the end -- reliability."

Bold claims, given that the product is early stage, and the market for optical switches has been put on hold. "The best I can say about that [the market]," Bent says, "is that lots of people have tried to enter the photonic switch market and failed. But there is still a need."

In its favor is the fact that Continuum isn't just relying on the optical switch market. Founded in 1998, it's been selling products based on its smart material into other markets -- military stealth technology and vibration damping -- for several years.

At the OFC conference back in March, the startup showed a demonstrator of its switch technology -- a 9x9 optical switch with an insertion loss of less than a decibel. Bent claims that it can make a 128x128 switch with losses under 1 dB -- a number that has competitors raising their eyebrows.

"If they're claiming all ports across a fully packaged device at low loss, that would be hard to believe," says Conrad Burke, OMM Inc.'s senior VP of sales and marketing. For comparison OMM, which makes switches up to 32x32, claims insertion losses of under 7 dB for its biggest switch. And losses tend to increase as switch size increases.

Burke also points out that there's a big difference between a lab experiment and, worst case, fiber-to-fiber measurements in a fully-packaged device.

A few days previously, Optimer Photonics Inc. scored $5.5 million to continue development of a polymer for optical switching (see Optimer Photonics Grabs $5.5M ).

Optimer is a spinoff of Battelle Memorial Institute, an R&D establishment that primarily works for U.S. government departments. Battelle previously incubated PIRI, a developer of Arrayed Waveguide Gratings (AWGs) , which was sold to SDL for $148 million in October 2000 and then became part of JDS Uniphase Corp. (Nasdaq: JDSU - message board; Toronto: JDU) until JDS shut it down a few months ago (see JDSU Posts Loss, Buys Startup ).

Optimer was founded in July 2001 by a bunch of integrated optics experts who hadn't left Battelle with the PIRI sale. They were joined by a group of materials scientists and chemists, to help in the development of an electro-optic polymer -- one that changes refractive index when a voltage is applied.

Optimer isn't the only startup developing electro-optic polymers for optical switching. Several others, including, Lumera Corp., are using materials developed by Dr. Larry Dalton at the University of Washington (see Polymer's Progress ).

But unlike the others, Optimer is planning to use its polymers in conjunction with waveguide components, like AWGs, bought from elsewhere, to make a variety of components, including modulators and attenuators as well as switches. It hasn't yet decided if it will sell end-products itself, or if it will partner with AWG companies.

Optimer's investors are Battelle, Primaxis Technology Ventures Inc., and Mitsubishi Corp.

— Pauline Rigby, Senior Editor, Light Reading
http://www.lightreading.com/

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