Press Releases

Capella Photonics Closes $6 Million in Series C Funding and Expands Sales and Marketing

Pioneer of Wavelength Selective Switch Modules Enters Commercialization and Growth Phase as Market Demand Materializes

SAN JOSE, Calif.--(BUSINESS WIRE)--Oct. 18, 2004-- Capella Photonics, Inc., a leader in wavelength selective switch (WSS) modules for use in reconfigurable optical add/drop multiplexer (ROADM) and optical cross connect (OXC) applications, announced today the closing of $6 million in its Series C financing round. The new capital will enable Capella to continue to scale marketing and sales resources and to deepen relationships with contract manufacturers in accordance with customers' increasing demands and expectations. Participants in the round include new investor Horizon Technology Finance, in addition to previous investors Bay Partners, Vanguard Ventures, BCE Capital and several private investors.

"Successful completion of customer trials in both North America and Europe has opened exciting growth opportunities for Capella," said Joseph Davis, President and CEO of Capella Photonics. "We are extremely pleased to have the continued support of our strong investor syndicate which now includes Horizon Technology Finance."

Capella's WavePath portfolio includes solutions for long haul, regional and metropolitan networks, each featuring a high level of functional integration in a reliable, compact, cost effective module. Through dynamic and remote reconfigurability, coupled with channel equalization and performance monitoring, the WavePath products afford equipment manufacturers the ability to offer solutions that greatly reduce the time and cost of planning, deploying, provisioning and maintaining today's optical networks.

"Capella's WavePath solutions are enabling the evolution of today's networks into truly intelligent optical networks," said Gerald Michaud, Managing Member of Horizon Technology Finance. "We are extremely excited by the growth potential of Capella Photonics."

"Capella is offering solutions that solve the problems carriers are facing in deploying, provisioning and managing broadband services," said Elizabeth Perry, a member of Capella's Board of Directors, President and CEO of netZentry, Inc. and former Senior Vice President and General Manager of Ciena's Core Networking Group. "Capella's advancement into this expansion stage will strengthen its lead in the market for dynamically reconfigurable optical modules."

Capella also announced today the appointment of Ken Falta as Vice President of Sales. In this position, Mr. Falta will direct the development and implementation of global marketing and sales operations for Capella as the company continues to advance the market for wavelength selective switches. Ken brings extensive knowledge and 15 years of experience in the communications industry to Capella. Prior to joining Capella, Ken was Vice President of OEM sales at Glimmerglass, Director of Worldwide Sales at OMM and held various sales and management positions at Lucent's Optoelectronics Division and General Instrument (now Motorola). Mr. Falta holds an MBA from LaSalle University in Philadelphia and a BSEE from the University of Pittsburgh.

"Capella's commitment to understanding and exceeding customers' expectations coupled with extraordinary technical talent is evident in the WavePath portfolio," said Ken Falta. "Capella has delivered a truly scalable and innovative solution to the optical communications market."

About Capella Photonics
Located in San Jose, California, Capella Photonics is the leading supplier of wavelength selective switch (WSS) modules for use in reconfigurable optical add/drop multiplexer (ROADM) and optical cross connect (OXC) applications. The company's solutions are based on an extension of free-space optics technology proven by the founders' groundbreaking work in the fields of optical and magnetic data storage. Capella's WavePath product line enables system architects to design optical platforms that offer dynamic and remote reconfigurability, thus greatly simplifying the engineering and provisioning of optical networks. For additional information, please visit www.capellaphotonics.com.

About Horizon Technology Finance LLC
Horizon Technology Finance LLC is an independent venture debt firm that provides senior and subordinated working capital loans, equipment loans, and equity to emerging technology companies in the life science, health care, information technology and software industries. Horizon provides a refreshing alternative to the restrictive structures offered by banks and corporate finance companies. For more information please visit our web site at www.horizontechfinance.com.

About Bay Partners
Bay Partners is an early-stage venture capital firm with over $1 billion in capital under active management. Since 1976, Bay Partners has invested in more than 200 infrastructure technology companies. The firm focuses its investments in wireline, wireless, and enterprise services, software, equipment, and components/semi-conductors. Examples of Bay's portfolio companies include Brocade Communications, Digital Island, Informatica, Exodus Communications, SonicWALL, and WebLogic/BEA Systems. For more information, visit www.baypartners.com.

About Vanguard Ventures
Vanguard Ventures is a venture capital firm specializing in seed and early stage high technology investments, with offices in Palo Alto, California and Houston, Texas. The Partners have extensive and successful backgrounds as technologists, operating managers, entrepreneur-founders and venture capital investors. Since 1981, Vanguard has funded 118 startups with more than 30 of these already becoming major corporate successes. In aggregate, these companies returned approximately $1 billion to investors. For more information, go to www.vanguardventures.com.

About BCE Capital
BCE Capital is a leading venture capital firm, investing in early stage innovative companies in both communications and information technology. Since 1987, BCE Capital has had a successful track record in backing and assisting over 40 emerging growth companies, many of which have gone on to be leaders in their respective industries. BCE Capital is currently investing in its fourth fund, with a mandate over the next five years to manage an investment pool of $250 million in venture related investments. BCE Capital, with offices in Toronto and Ottawa, is an affiliate of Bell Canada Enterprises, Canada's largest communications company. Additional information on BCE Capital can be found at www.bcecapital.com.