Compass Electro-Optical to raise $20m

Singapore's Crescent Point led the round in its first investment in Israel.

Compass Electro-Optical Systems Ltd. (Compass EOS) is about to close a $20 million financing round led by Singapore private equity fund Crescent Point Group. This is Crescent Point's first investment in an Israeli company, and in turn it gives Compass EOS access to Far Eastern markets.

Compass EOS is developing a terabit bandwidth platform for Internet-based triple and quadruple play services. It is one of the few start-ups developing new communications technologies, and these companies are finding it increasing difficult to raise venture capital, and telecommunications equipment providers are worried about the falloff in investment as it affects innovation in the field.

Current investors Pitango Venture Capital, Benchmark Capital, Northbridge Venture Partners, and Cisco Systems Inc. (Nasdaq: CSCO) are also participating in the round. The financing brings the amount raised by Compass EOS to $55 million.

Compass EOS CEO Michael Laor and CSO Dr. Michael Mesh founded the company in 2005. The company is developing an optical router, a longstanding dream in the telecommunications industry. It has been operating in stealth mode until now, declining to disclose details about its products under development. The company's website only says, "Compass-EOS is bringing to market a radically different system architecture that results in an order-of-magnitude increase in price-performance."

Crescent Point has offices in Singapore, Shanghai, and Jeddah, and also has executives based in New York, London, and Kuala Lumpur. Since 2003, it has invested $700 million in companies in a range of industries, including aviation, education, healthcare, environmental services, financial services, natural resources, real estate, and manufacturing.

Crescent Point has made one previous investment in an Israeli related start-up, Xconnect Ltd., which is headquartered in London, and has an R&D center in Jerusalem.

Published by Globes [online], Israel business news - - on July 8, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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