Capella, a provider of optical switches for broadband networks, said it has raised $20 million of equity and debt financing in what amounts to a financial restarting of the company.

Capella sells wavelength selective switches (WSS) for use in reconfigurable optical add/drop multiplexers (ROADM) applications.

The funding was was co-led by Levensohn Venture Partners and Rustic Canyon Partners and included funding from Formative Ventures, as well as participation by existing investors. Square1 Bank provided the banking and debt facilities.

In its statement, the company cites an analyst, Jeffrey Osborne, Equity Research Analyst at CIBC World Markets:

“Telecom carriers are in the midst of upgrading their networks to support new IP-based services such as faster broadband networks, video, business Ethernet services and wireless backhaul. We see wavelength selective switches, such as Capella’s next generation technology, being very well positioned to capitalize during this period of network transformation.”

Capella had earlier raised $44 million in five rounds.