Chromatis Networks

About Chromatis Networks

Chromatis Networks was an Israeli startup established in 1998 by founders Orni Petrushka and Rafi Gidron. The company emerged during the dot-com boom, securing initial funding from Jerusalem Venture Partners (JVP) and Lucent Venture Partners. Chromatis focused on developing optical networking solutions designed to enhance the efficiency and capacity of metropolitan area networks.

The company's core business centered on providing transport solutions for carriers, enabling them to meet the escalating bandwidth demands of urban regions. Chromatis developed equipment to manage voice, data, and video traffic over fiber-optic networks. Its flagship product line, the Metropolis system, was engineered to integrate various service types onto a Wave Division Multiplexing (WDM) system. A key feature was its "selective wave-division multiplexing" (SWDM) technology, which allowed network providers to dynamically activate optical wavelengths as needed, aiming to significantly reduce the initial costs of deploying Dense WDM (DWDM) capabilities. The business model was predicated on selling this high-tech equipment directly to telecommunications carriers, such as Local Exchange Carriers (LECs) and Interexchange Carriers (IXCs).

In a landmark event for the Israeli tech scene, Lucent Technologies acquired Chromatis in June 2000 for approximately $4.5 billion in stock, which was one of the largest acquisitions in Israel's history at the time. Lucent, which already held a 7% stake, made the acquisition to bolster its position in the rapidly growing metro optical networking market and to compete with rivals like Nortel Networks and Ciena. Despite the high-value acquisition and promising technology, the timing coincided with the burst of the tech bubble. Lucent faced its own financial difficulties, and just over a year later, in August 2001, it shut down the Chromatis Networks division, stating it no longer aligned with its strategic focus.