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Photonics Lures Venture Capital

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Stephanie A. Weiss

The good news from the PricewaterhouseCoopers Money Tree Survey: Photonics companies attracted more than $816 million in venture capital in the last quarter of 1999.

The bad news: Those pesky "dot coms" snatched up $3.5 billion in the same period.

Overall, the quarterly survey of American venture capitalists revealed that they invested a record $35.6 billion in 1999, including a whopping $14.69 billion in the fourth quarter.

Photonics companies -- firms developing photonic components and systems but not "communications networks" -- accounted for 4 percent of the companies receiving money in the fourth quarter and 6 percent of the invested dollars. The median investment in photonics was $8 million.

Most of the photonics investment was in companies related to telecommunications and medical instrumentation.

Big fourth-quarter winners in photonics included:
• Corvis Corp. of Columbia, Md., an optical switching equipment manufacturer, $213 million.
• Cielo Communications of Broomfield, Colo., a laser transceiver manufacturer, $37 million.
• Illumina Inc. of San Diego, developer of fiber optic medical instrumentation, $28 million.
• Optical Micro-Machines Inc. of San Diego, supplier of subsystems for optical switching equipment, $22.6 million.
• Agility Communications of Santa Bar-bara, Calif., a laser transmitter developer, $14 million.
• Picolight Inc. of Boulder, Colo., manufacturer of devices based on vertical-cavity surface-emitting lasers, $10.85 million.
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Published: April 2000
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