Jerusalem-based optical startup Chiaro Networks is feeling the pain of the telecommunications crisis, as it raises capital at a third of its previous company value.
The company's technology decongests bottlenecks at optical fibers intersections to improve data communications.
Chiaro's latest private placement prices it at a pre-money value of $125 million, compared with $400 million in September 2000, reports Dolev & Abramovitch Hi-Tech Information.
In September 2000 Chiaro secured over $100 million in the biggest private placement by a privately-held Israeli technology company.
Last year's round was led by the Israeli funds Pitango Venture Capital (formerly Polaris) and Koor Corporate Venture Capital.
New investors last year included Charter Growth Capital, Mustang Ventures, Robertson Stephens, and the venture capital fund of Vitesse Semiconductor Corporation (Nasdaq:VTSS).
Other shareholders who kicked in include CenterPoint Ventures, Crown Advisors International, Intel Capital, InterWest Partners, Sevin Rosen Funds, Star Ventures, and Rho Management.
Flouting expectations, demand for novel communications solutions has disappeared as phone companies feel the pain of over-investment and equipment providers, including giants such as Cisco Systems (Nasdaq:CSCO) and Nortel (NYSE:NT), reel.
Chiaro was founded in 1997 by VP and General Manager Eyal Shekel. To date the company has secured $130 million in three financing rounds. It maintains facilities in Jerusalem and Dallas, Texas.