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Capella secures $20m for expansion

13 May 2011
Capella Intelligent Subsystems has raised $20m (€14m) in venture capital funding, as the company rides the wave of the fastest growing segment of the optical communications market – reconfigurable optical add-drop multiplexers (ROADMs).  Capella makes wavelength-selective switches (WSSs), which provide the core functionality in ROADMs, directing signals in the optical domain without needing to convert them back to electronics.
The oversubscribed round was led by Black Diamond Ventures, who were joined by existing investors Levensohn Venture Partners, Formative Ventures, Lucas Venture Group and Rustic Canyon Ventures.  Capella also welcomed a new investor, SingTel Innov8, the corporate venture arm of the national carrier of Singapore, the SingTel Group.

“With the recent additions to their senior management team, Capella is poised for what we expect will be a period of explosive growth for the company worldwide,” said Christopher B. Lucas, founder and managing director of Black Diamond Ventures.

Capella’s chief executive Larry Schwerin told Lightwave that the company is “in the right place at the right time” to tap into the phenomenal growth in ROADM hardware.  Sales of WSS components used for ROADM systems and subsystems more than doubled in 2010 compared to 2009, according to market research firm Infonetics.   The ROADM market is forecast to grow at a combined annual growth rate of 20% to reach $1.8bn (€1.27bn) by 2015. 

In fact, demand for WSS components was so strong that it outstripped supply over the past year, with the result that the average selling price of WSS components has actually increased – although Infonetics doesn’t expect that trend to continue as manufacturers like Capella expand their production capacity. 

By Pauline Rigby