Optical switching start-up MemLink has laid off most of its employees and is preparing to close down. The company’s cash reserves are almost gone, and its managers are waging an extensive and near-desperate campaign to raise capital from investors.
In late May, MemLink received a $6 million bridging loan from its shareholders. The most interesting about the loan was that not all the shareholders agreed to participate. Those who did were Israel Seed Partners, Lucent Venture Partners, Redwood Partners and Oak Investment Partners. Israel’s Nisko Hi-Tech and Aurum SBC Ventures and Southwestern Bell Telephone (NYSE:DSW) of the US declined to participate.
MemLink develops MEMS optical switching technology. Unlike most existing switches, its switches use mirrors' binary motion to create a 3D architecture. No company has yet been able to build a 3D digital switch. MemLink chairman and CEO Stephen R.Rizzone told ''Globes'' early this year, "Tests by the company showed the technology works well, and the company's products will soon be tested by telecom companies. The company will need additional funding for these tests to help it reach the commercial stage." MemLink needed to hold another financing round for this purpose, which never took place.
MemLink was founded in 1999 by Avigdor Huber, Igal Chertkow, Moshe Medina, Slava Krylov and Yehuda Rosenblatt. The company raised $3 million in its first round and $21 million in its second.
Published by Globes [online] - www.globes.co.il - on September 12, 2002