Goodbye Tasman, Luminous — any other walking dead out there?
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| Living Dead |
All those Silicon Valley networking companies funded during the boom years of 2000 or before are finally — finally! — beginning to disappear.
We called them the “living dead,” the firms loaded with cash, still alive and kicking, but just as good as dead because there was no market to sustain them as independent companies. The best they could do was sell out at cost — though most simply shuttered for a big loss.
Tasman Networks, a maker of network routers, is one of the latest to disappear. On Tuesday, news emerged that…
Nortel Networks will acquire Tasman at about cost (investors pumped in about $93 million into the company over the years, and the selling price is $99.5 million). Mayfield and NEA were among the investors. But WorldCom Ventures, the venture arm of that famous company that went down in scandal, topped it off, investing in Tasman when it was valued at $204 million in December 2000. (To be fair, Tasman had a decent product. Here is the Merc story on this.)
And then there is Luminous, which is also throwing in the towel, but apparently without a sale. The Cupertino networking company ate through $183 million in VC investments over seven years. The investment bankers, hoping for an exit during the boom years, joined in, with Morgan Stanley investing at a valuation of about $235 million in 2000.
Notable is that Doll Capital Management and Vanguard and others provided up to $30 million in debt financing (VentureWire, subscription required) for this company as late as the second half of this year.
Interesting that CEO Chris Stark lived in Texas, and was flying in to manage the company. Though LightReading doesn’t say when this started; perhaps it was just happening at the end? Hope so.
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About the Author, Matt Marshall
Matt launched VentureBeat in September of 2006, with the realization that no one else was covering the entrepreneurial and tech innovation scene with the velocity or depth that he was. Prior to founding VentureBeat, he covered venture capital for the San Jose Mercury News from 2001 to 2006. In 2002, Matt was awarded "Journalist of the Year" by the Northern California Society of Professional Journalists. Prior to working at the Merc, he was a correspondent for the Wall Street Journal in Bonn, Germany from 1995 to 1998, and a writer for the Washington Post in 1994. Matt holds a PhD in Government and an MA in German and European Studies from Georgetown University. In addition to VentureBeat, Matt is also the Executive Producer of DEMO, the leading launchpad event for emerging technologies.
