Quantum Photonics and Codeon Merge to Form Covega, Raise $17M
From VentureWire: By Michelle Tsai JESSUP, MD. --
Optical component startups Codeon and Quantum Photonics have merged to form Covega and have raised $17 million in Series A funding for the new company.
Quantum Photonics uses indium phosphide-based material to make components such as lasers, gain chips, and semiconductor optical amplifiers. Like Quantum Photonics, Codeon in nearby Columbia, Md. also provides components for the transponder segment of the fiber optic system. Specifically, Codeon makes lithium niobate external modulators.
Both Quantum Photonics and Codeon were both actively searching for merger partners when they began talking to each other. The new company, Covega, is the result of a 50-50 merger between the two firms. Robert Harvey, CEO of Codeon, becomes CEO of the new firm, while Quantum Photonics's former CEO Dan Petrescu serves as president.
The board is made up of equal representation from the investors of the two firms: John Spirtos, general partner of OCG Ventures, an investor in both; Luis Llovera, an investment partner at Siemens Venture Capital; Aaron Vermut, principal at NEA; Pascal Luck, managing director at Core Capital; Don Rainey, venture partner at Intersouth Partners; Andy Jones, partner at Boulder Ventures; and Mr. Harvey.
Mr. Harvey said the two firms have combined the management and staff and now have about 100 employees. Twenty positions were cut as a result of the merger.
The new firm has raised $17 million in Series A funding from existing investors: NEA, OCG Ventures, Boulder Ventures, Core Capital Partners, EDB Ventures, Intersouth Partners, Kinetic Ventures, and Siemens Venture Capital. The group of investors set the terms of the financing.
Covega will continue to offer all Quantum Photonics and Codeon products and has begun discussing new products that integrate the two firms' technologies with new customers.
The new funding will be used to expand Covega's product line, as well as for working capital and ongoing operations, Mr. Harvey said. Covega will retain Quantum Photonics's manufacturing facility, which is the newest and can accommodate both product lines; Codeon's two fabs have been rented.
Based on Covega's burn rate, the Series A funding will last several years, Mr. Harvey said. Prior to the merger, Covega raised $62 million from Siemens Venture Capital, Amerindo, Canadian Imperial Bank of Commerce, BankAmerica Investment, New Enterprise Associates, OCG Ventures, The Grosvenor Funds, Kinetic Ventures, and Boulder Ventures.
Quantum Photonics previously raised $35.6 million in venture capital from Boulder Ventures, Core Capital Partners, Davenport Capital Ventures, Intersouth Partners, Kinetic Ventures, Draper Atlantic, EDB Investments, Riggs Capital, OCG Ventures, and The Grosvenor Funds.