Compass-EOS breaks Israeli startup investment record with $160M in total
Compass-EOS just announced an additional $42M to add to their already massive current investment amount but it doesn’t look like employee expansion will follow suit. On the contrary…
Israeli startup Compass-EOS, developer of wireless router solutions for ultra-fast photonics data transfer between internal microchips, announced the raising of $42M from existing investors Pitango, Comcast Ventures, Cisco, Northbridge Venture, Benchmark Capital Partners and Marker LLC.
In addition to cajoling current investors to fork up extra cash after having already pumped in some $120M into the company, the Israeli startup’s extraordinary diplomatic skills were made evident in its ability to form an international superpower detente by bringing together a US-based private investment fund and the Russian Government’s RUSNANO to join in the round. The latest funding brings the company’s total investment to date to a record breaking $160M, the most investment secured by any Israeli startup.
Ultra fast routers, ultra fast market penetration
To say that internet performance is a key concern of telecommunications providers would be an understatement. Often times problems with performance arise out of the multi-chip data transfer infrastructure that make up the guts, nuts and bolts of core internet routing systems that are required for supporting multiple telecommunications interfaces of the highest speeds. Compass-EOS’s approach is to use a distributed switching architecture of modular routing building blocks to create a simpler and more scalable process for data transfer. They call the technology behind their system icPhotonics interconnect and it can be found in every Compass-EOS carrier grade router.
Having just come out of stealth mode this past March, the seven year old company is already making waves in the South Pacific signing deals with CERNET – the largest nationwide education and research computer network in China, COMDATE Pty Ltd of Australia and Net One Systems – a leading systems integrator in Japan.
The cost of scale
The only sour note in this year of accomplishment has been the company’s announcement that they will be laying off of tens of employees, a revelation that came in conjunction with their announcement of the new funding. This all begs the question; if everything’s so great, why the mass layoffs? The company claims it’s all part of a recent bout of streamlining measures. Probably true, but that only passes off one question for another one; usually funding equals expansion, so why the streamlining?
Could it be a record breaking investment influx has first generation investors demanding some fiscal responsibility to start laying the groundwork for some positive revenue returns and a little more black ink on the next balance sheet? True, the company just came out of stealth and they should perhaps be cut some slack, but after taking six years to introduce yourself to the market and gobbling up $160M in the process, I’d imagine I might be a little antsy myself.
Compass-EOS was founded in 2006 by president Michael Laor and chief scientist Dr. Michael Mesh. The company’s R&D center is located in Netanya Israel, it’s headquarters are in California USA and satellite offices are currently operational in Asia Pacific.