SOURCE: Capella

March 15, 2007 07:50 ET

Capella Raises $20 Million for Corporate Expansion Leveraging the Success of Its Wavelength Management Subsystems

SAN JOSE, CA -- (MARKET WIRE) -- March 15, 2007 -- Capella, the leading provider of Wavelength Selective Switches (WSS) for use in reconfigurable optical add/drop multiplexers (ROADM) applications, today announced the completion of $20 million of equity and debt financing. The round was co-led by Levensohn Venture Partners and Rustic Canyon Partners and included funding from Formative Ventures, as well as participation by existing investors. Square 1 Bank provided the banking and debt facilities. As part of the transaction, Kip Sheeline from Levensohn Venture Partners and Michael Kim from Rustic Canyon Partners will join Capella's Board of Directors. Capella will use the funds to accelerate shipments to existing customers and to expand its product lines to serve additional markets.

Larry Schwerin, CEO of Capella commented, "We are excited to add a new group of top-tier investors who share Capella's vision. Having their support validates our business model and enables us to meet the high-level of customer demand for our products. It is critical that we take advantage of our momentum domestically and internationally by expanding Capella's product family and market opportunities and by further scaling our manufacturing operations at Fabrinet. This capital also enables us to more effectively support our strategic relationship with Furukawa, and to ensure complete customer satisfaction during a period of rapid growth."

According to Jeffrey Osborne, Equity Research Analyst at CIBC World Markets, "Telecom carriers are in the midst of upgrading their networks to support new IP-based services such as faster broadband networks, video, business Ethernet services and wireless backhaul. We see wavelength selective switches, such as Capella's next-generation technology, being very well positioned to capitalize during this period of network transformation."

Kip Sheeline, Managing Director, Levensohn Venture Partners added, "We are very excited about the Capella investment. The company has an outstanding team, a best-in-class family of products and an excellent value proposition for its customers. It is the clear industry leader in delivering next-generation WSS solutions. As bandwidth demands on metro and long-haul infrastructure grow world-wide, the performance and flexibility of our solution lends itself to a large and growing number of carrier and MSO network deployments."

Michael Kim, Partner, Rustic Canyon Partners, commented, "Delivering rich media content services requires cost-effective network flexibility and scalability. Capella provides tremendous value to its customers, enabling them to provide optimized, reconfigurable networks to meet the demands of this broadband-intensive services rollout. This round of capital provides Capella with the resources to meet its customer demand."

Formative Ventures' General Partner, Dino Vendetti, noted that, "Capella is already making a meaningful difference in a rapidly growing and critical market. We are very excited to have the opportunity to help the Company as it builds on its technical and strategic edge."

Ram Orenstein, Associate VP for Optical Product Line Management of ECI's Transport Networking Division stated that, "With the deployment of advanced broadband and IPTV services globally, next-generation WSS technologies such as those from Capella significantly reduce capital and operating expenditures of the services operators. Capella's solutions offer dynamic wavelength provisioning capability that eliminates the multiple, manual touch points in the network, and offers real time optical performance monitoring to guarantee the best QoS for all services. Capella is at the forefront of this evolution."

Capella will feature a live demonstration of its products at its OFC/NFOEC Booth #3713 at the Anaheim Convention Center, Anaheim, California, March 25-29, 2007.

About Capella

Capella is the industry-leader of wavelength selective switch (WSS) technology for use in reconfigurable optical add/drop multiplexers (ROADM) and optical cross connect (OXC) applications. Capella's patented WavePath® products provide the best performing WSS on the market offering dynamic, remote reconfigurability with fully integrated optical channel monitoring (OCM) for simplifying network operations and planning, while dramatically reducing costs. Capella's products are used in both metro and long haul applications. Founded in 2000, Capella is a privately held company located in San Jose, California. For more information, visit www.capellainc.com.

About Levensohn Venture Partners

Levensohn Venture Partners is an early stage venture capital firm based in San Francisco, California, that makes active, concentrated investments in a select group of technology companies. LVP emphasizes companies that are transitioning from product development to the early commercialization of their product or service. Since our inception in 1996 we have focused our investments in category-leading and capital-efficient companies. We have also taken a leadership role in helping to define best-practices for venture capital board governance. For more information, visit www.levp.com

About Rustic Canyon Partners

With over $800 million under management, Rustic Canyon Partners invests in early stage and middle-market companies positioned for strong growth. The firm focuses on growth opportunities catalyzed by technological shifts, market evolution, or regulatory changes. To date, Rustic Canyon has invested in a broad array of sectors including digital media, business and information services, communications, software, and renewable energy. Rustic Canyon Partners has offices in Santa Monica, Silicon Valley and Seattle. For more information, visit www.rusticcanyon.com.

About Formative Ventures

Based in Menlo Park, California, Formative Ventures is a leading early stage venture capital firm that invests in the industry's next-generation emerging technologies leaders in areas such as communications, wireless, and next-generation Internet solutions. For more information, visit www.formativeventures.com.

About Square 1 Bank

Square 1 Bank is a full service commercial bank providing financial services to venture capital firms and entrepreneurs in all stages of growth and expansion. To serve its relationships, Square 1 has offices coast to coast in Austin, Boston, New York metro, Reston, San Diego, Seattle, and the Silicon Valley. The bank is headquartered in Durham, North Carolina. For more information, visit www.square1bank.com.

Contact Information

  • For further details please contact:
    Capella
    Kenneth J. Falta
    VP of Sales and Marketing
    Tel: +1-408-360-4241
    Email Contact
    www.capellainc.com

    Stepping Out Communications
    Lisa Copass
    +1 925-253-8445
    +1 925-550-1885