Start-up Laurel gets off ground with 'global' deal
A telecommunications equipment company launched in late 1999 in the Marshall Township home of one of its founders said Monday it has begun shipping its first revenue-generating products.
Laurel Networks Inc. was founded by five former Fore Systems professionals with the goal of building a smarter Internet traffic router that would enable customers to generate more revenue over complex computer networks.
Laurel Network's contract with Broomfield, Colo.-based Level 3 Communications validates the two years spent developing its product.
"This is a reasonably well-sized deal," said Laurel Networks co-founder Steve Vogelsang. "It's a global deployment."
Vogelsang wouldn't disclose the value of the contract, saying that depends on the pace at which Level 3's customers use new services that Laurel Networks' "smart" router will provide.
Level 3 is in the business of providing telecommunications access over fiber-optic cable to large telephone companies such as Ameritech and Verizon, to Internet service providers, to large companies and to smaller telephone companies known as competitive local exchange carriers (CLECs). It operates local loops in 36 U.S. and European markets, in addition to a trans-Atlantic cable.
Laurel Networks, now based in Robinson Township, where it employs about 150 people, raised $65 million in venture capital 18 months ago to fuel its product development. Vogelsang said some of that money is still in the bank, and the company is using its cash at a slower rate now that it is producing revenue. There are no immediate plans to raise more equity, but short-term financing may be necessary to sustain growth.
"We're in very good shape. Our revenue has been increasing quarter over quarter and we still have plenty of capital," he said.
Vogelsang said Laurel Networks beat industry giant Cisco Systems to win the Level 3 business. He said Laurel Networks' product delivered more functions and has more flexibility to work within various networking frameworks, such as asynchronous transfer mode (ATM), frame relay and Ethernet, than did Cisco's offering.
Vogelsang said Laurel's equipment is in various stages of certification testing in the labs of several other telecom carriers, although he said no new contracts are pending.