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New money for Petaluma's Cyan Optics

  • 9/15/2009:Nathan Knuth, software leader, right, and Scott Pradels, hardware leader, head the Cyan team building high-bandwith fiber-optic systems.

    PC: Nathan Knuth, software leader, front and Scott Pradels, hardware leader, head the Cyan team building high-bandwith fiber optic systems in Petaluma.

Petaluma telecom startup Cyan Optics, which sells a next-generation system for handling network traffic, has raised another $22 million in venture capital.

"It's our largest round to date," said Mike Hatfield, Cyan's chief executive.

Cyan, founded in 2006, rolled out its optical communications technology last September. It is aimed at phone companies, Internet providers and cable networks struggling to deliver a flood of digital services.

Cyan's platform is attracting industry attention because Hatfield and his partners have held top positions at Cisco Systems, Calix, Cerent, Advanced Fibre Communications and other telecom equipment makers.

The $22 million infusion, which was listed in a Dec. 30 regulatory filing, brings Cyan's venture backing to nearly $50 million since 2006. The investors include Norwest Venture Partners, Azure Capital Partners and Tenaya Capital.

Cyan wants to capture a share of $7.2 billion in U.S. economic stimulus money aimed at extending broadband service to rural and other "underserved" U.S. markets. The program offers grants and loans for communications providers to upgrade their networks. About $4.8 billion was released by the program last week.

Cyan said its technology makes it easier and cheaper for carriers to manage the flow of voice, video and data traffic. It features 3-D software that allows network operators to see different "layers" of traffic on their systems.

Cyan has about 60 employees in Petaluma, where it does engineering, marketing, testing and other functions. Production is outsourced to Flextronics, a Singapore-based contract manufacturer with locations in North America, Asia and Europe.

Hatfield declined to say how Cyan plans to spend its latest infusion of cash, but the company is hiring communications engineers, according to its Web site.

Hatfield founded Calix, a $250 million Petaluma company that has filed plans to stage a public stock offering later this year. He was co-founder of Cerent, another Petaluma startup that was acquired by Cisco in 1999 for a Telecom Valley record $7.3 billion.

Hatfield also was vice president at Advanced Fibre Communications, which was sold to Tellabs in 2004 for $1.5 billion.


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