The optical components and subsystems developer's loan comes after a three-year turnaround process.
Optical components and subsystems developer ColorChip Ltd. has obtained a $5 million loan from Plenus Venture Lending Fund, following its turnaround process over the past three years. The restructuring included new activities, the establishment of a new plant, hiring staff, and the raising of $20 million since 2009.
Shimon Eckhouse, who founded Syneron Medical Ltd. (Nasdaq: ELOS) and Lumenis Ltd., cofounded ColorChip in 2000 along with Prof. Shlomo Rushin, and Moshe Price. It originally developed communications components for accelerating data transmission over fiber optics. The company manufactures the components in way similar to the production of silicon semiconductors, but on glass, making the process much more complicated than simple development, and this was apparently why it failed to take off. In 2009, the company was declared insolvent and fired scores of employees.
In 2009, Gemini Israel Funds and Vertex Venture Capital decided to keep ColorChip going. In June 2011, Koby Segal took over as CEO, and the company's sales and staff have since expanded rapidly. It has 110 employees at its new plant in Yokne'am, opened six months ago, and at its plant in Caesarea. It raised $12 million in its last investment round from Gemini, Vertex, and BRM Capital in 2011.
ColorChip makes two kinds of components: optical transceivers that convert optical wavelengths into electrical signal for use by computers; and high-speed optical splitters for a wide range of products. The company's primary market, in both its original and revamped incarnations, is optical communications for end users. Under Segal, the company has also entered a new market: fiber optics for accelerating data communications in large server farms. He says that this business should generate more than $10 million in annual sales in 2012, up from a few million dollars last year.
The growth in ColorChip's business is due to rapidly rising demand for telecommunications in emerging markets, especially China, which mostly uses fiber optics in its networks, and from the rapid growth in data consumption by mobile devices.
"The move to the new plant will enable the company to meet demand for its products and to realize its growth potential and boost sales," said Plenus general partner Shlomo Karako.
Published by Globes [online], Israel business news - www.globes-online.com - on October 10, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012
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