Kilo Lambda: Nothing like experience for opening doors

Kio Lambda's technology is just taking its first baby steps but this hasn't stopped Yozma and Canadian Skypoint Telecom from investing $3.5 million in seed money.

There are several ways to increase fiber optic capacity so that more information can be transmitted. One of them is through a technology Kilo Lambda plans to offer. The Israeli start-up deals with the laser light source.

At present, the world standard for optic communications systems, DWDM, is for ranges of 100 gigahertz between two frequencies over which laser-based information is transmitted. The laser creates heat, which in turn creates deviations in the frequency and can cause the two frequencies to collide and create problems in the system.

Kilo Lambda is proposing to shorten the standard from 100 gigahertz to 10 gigahertz in the initial stage, thereby increasing the number of frequencies and fiber capacity ten fold. Kilo Lambda would accomplish this by reducing and controlling the number of distortions to avoid collisions.

Other solutions for increasing capacity are compressing greater amounts of information on the same frequency, but these solution face dispersion problems due to the signal distortion, which needs to be re-fused. The figures may be promising, but there seem to be a number of problems in the demand for this technology. It is clear that even if Kilo Lambda's technology is ready in a year, it will not be instantly in demand, since a need has not yet really been created. The communications cable has 98 optic fibers. Current capacity requires the use of only a few smart fibers so that a critical problem in frequencies can be solved by additional fibers already found in the cable.

Another problem, possibly smaller, is that there is no known company capable of doing what Kilo Lambda offers. Another Israeli company, BroadLight, already offers a technology for stabilizing wandering laser frequencies, which is one of the best offered.

Apart from lacking a similar technology, Kilo Lambda still has not passed the feasibility test, which it plans to do in the next six months. All these problems did not prevent the Yozma fund and the Canadian Skypoint Telecom fund from nvesting $3.5 million at seed in May this year. The Yozma fund explains the relatively unusual investment by saying that an external consultant it hired to examine the start-up predicted that Kilo Lambda would know how to deliver the goods, particularly since it is not a start-up founded by college students.

Kilo Lambda was founded by CEO Doron Nevo and Dr. Ram Oron, the son of Dr. Moshe Oron, chief scientist at El Op. Nevo met Oron when he babysat for Weizmann Institute of Science graduate Oron thirty years ago. Moshe Oron joined the start-up at a later stage.

Nevo had been general manager of Clalcom, was responsible for business relations with foreign companies at US communications company Sprint (NYSE: FON; PCS) for six and a half years. In his final year at Sprint, he was the company's representative in Israel. He is better known as the founder of Clalcom, from which he founded Barak and was instrumental in Barak's winning its operating license for international calls.

Nevo set up Teleclal out of Clalcom and served as its chairman. In 1995, he set up a company named NKO in the US to develop the world's first VoIP system that provided an answer for communications providers. Nevo also serves on the board of directors of AudioCodes (Nasdaq: AUDC)

On his return to Israel in 1999, he joined Yozma's Entrepreneur in Residence program, and looked for ventures. His search led him to set up Kilo Lambda at the beginning of the year. The company has a staff of seven, including four PhDs.

Kilo Lambda is designating its technology for systems manufacturers in various fields: ultra long haul, great distance, long haul, distances above 500 kilometers, metro (20-500 kilometers), and access (up to 20 kilometers). The technology is also designed for optical inspection systems.

The company plans to register six patents by the end of the year. "The technology is based on well-known physics," Nevo says, "The engineering problems are difficult but we're convinced we'll overcome all of them. As soon as we complete the feasibility study, we plan to raise more funds. Leading companies in the world have already heard of Kilo Lambda's plans to blaze a trail in the field and naturally, there 's a great deal of interest."

Nevo says most of the manufacturing will be done by outsourcing contractors, but part of it will be maintained inhouse for development purposes. There could be a need to acquire technologies for millions of dollars.

Business Card

Name: Kilo Lambda

Founded: Early 2001

Product: Laser optic communications technology

Founders: Dr. Ram Oron, Doron Nevo

Financing rounds: $3.5 million at seed

Employees: 7

Competition: None

Owners: Founders, Yozma Fund, Skypoint Telecom, private investors

Published by Israel's Business Arena on 8 August, 2001

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