VC invests $30m in DenseLight Semiconductors

Jan. 11, 2002
International venture capital group 3i Group plc has invested a total of $30 million in DenseLight Semiconductors Private Limited, a Singapore-based total photonics solution provider which owns proprietary technologies and has launched a range of products for the global optical networking industry

International venture capital group 3i Group plc has invested a total of $30 million in DenseLight Semiconductors Private Limited, a Singapore-based total photonics solution provider which owns proprietary technologies and has launched a range of products for the global optical networking industry.

The investment includes funds from the $400m 3i Asia Pacific Technology Fund and gives 3i the largest individual shareholding in the company. Existing shareholders include DenseLight's founders, members of the management team, NTU Ventures and employees of the rapidly growing company.

The investment by 3i has been made over a 15-month period, following an initial seed round investment of $1.2 million made by 3i in October 2000. Throughout this period, 3i has been working very closely with DenseLight management to build up DenseLight's manufacturing capability and expand its staff to manage what is now a fully operational facility. The investment was utilized to fund this development as well as to expand DenseLight's significant R&D programme which has resulted in 30 patent-pending inventions. During this period, DenseLight was in stealth mode as it finalised the commercialisation strategy for its technology and product roadmap.

The announcement comes as DenseLight unveils several new products ahead of major international photonics trade shows scheduled in the US and Europe in coming weeks. The company has also released details of its world-class manufacturing facilities and has revealed that engineering samples of products are currently being evaluated by customers in North America ahead of commercial production.

Founded by four former professors from Nanyang Technological University in Singapore, DenseLight was incorporated in May 2000 and currently employs close to 100 employees, of whom over 50% hold PhD and Masters degrees.

"With capital in place, a strong technology base, an experienced team, a wide range of innovative products, rapid time-to-market and global technical support, DenseLight is poised to be a major player in providing advanced component solutions to our customers, " noted Dr Yee-Loy Lam, DenseLight's Chairman and CTO. He added, "As the functional requirements for optical components multiply with the evolving complexity of global optical networks, our technologies will become very important, providing a vital solution for today's customers."

DenseLight has developed revolutionary photonics technologies that the company believes for the first time enables the commercial fabrication of integrated optical subsystems incorporating both active and passive components onto a single indium phosphide chip. The company's proprietary DensePIC technology allows it to manufacture a wide range of innovative high-performance indium phosphide (InP) based photonic integrated circuits (PICs) to meet the stringent needs of next-generation high-speed optical networks, empowering customers with competitive advantages in performance, power consumption, footprint, and total cost of ownership.

Added Dr Lam, "DenseLight's goal is to continuously invent and implement market-leading technologies to render high-yield and high-volume manufacturing of next-generation optical components. We believe that DensePIC will enable a paradigm shift in next-generation optical networking, significantly reducing total cost of ownership for our customers."

The dense wavelength division multiplexing optical components market (including active and passive components, modules and subsystems) is one of the fastest growing sectors of the telecommunications market.

Over the last few years, exponential growth in global data traffic and the proliferation of corporate networks have created unprecedented demand for bandwidth. While bandwidth has been added to long haul networks, there are still major bottlenecks in metro areas where DenseLight's cost-effective, high-performance products are a timely solution for increasingly cost-conscious customers looking to add capacity to this segment of the market.

3i brings expertise and contacts - in addition to capital
DenseLight is one of 3i's largest investments in the region to date since the company established its Asia Pacific business in 1997. The international venture capital group has been investing in the optical components industry for over 10 years and has built up a select international portfolio across Europe, the United States and with this investment, in Asia.

"We are very excited to be investing in such a promising business," noted Jane Crawford, Managing Director 3i Asia Pacific. "The company has a talented management team and proprietary technology and products with significant global potential."

She added, "The 3i team is working closely with the company as they continue to commercialise their technology and look to further funding rounds in the international marketplace. Our intention is to connect them to a wide range of international contacts with industry and business expertise and the ability to help drive the company's long term success."

Added Dr Lam, "3i's investment is a strong endorsement of DenseLight's technology and brings significant benefits to the business as we look to launch the company commercially on the global stage. 3i's long experience in growing businesses coupled with their ability to connect DenseLight with other innovative players via their unique international network will, we believe, add real value to DenseLight."

Ian Lobley, a senior member of 3i's Communications Sector Group commented, "3i is seeking to back companies who will drive the next wave of the 'optical revolution' where large scale deployment of low-cost products will be achieved. DenseLight is a good example of the type of businesses 3i is looking to back, and shows the geographical breadth of 3i's investments in the global optical components industry."

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