St. Louis, June 8, 1999 - A new company formed by three Washington University computer scientists has received initial funding of $ six million from two Silicon Valley venture capital firms to develop next-generation Internet technologies.
Growth Networks Inc.,with an office at suburban Brentwood, Mo, and headquarters in Palo Alto, Calif., is being financed by New Enterprise Associates (NEA) and Institutional Venture Partners (IVP) of Menlo Park, Calif.
The company is the brainchild of Jonathan S. Turner, Ph.D., Henry Edwin Sever Professor of Engineering, Jerome Cox, Sc.D., senior professor of computer science, and Guru Parulkar, Ph.D., professor of computer science.
Growth Networks has recently signed a licensing agreement with Washington University and this spring paid the first installment on the licensing fee under that agreement.
Andrew Neighbour, Washington University associate vice chancellor of technology management and director of the Center of Technology Management, considers the arrangement between the faculty involved in Growth Networks and the University a model for technology transfer arrangements.
"The Growth Networks venture illustrates how universities and the private sector can work effectively together to create new businesses without compromising the interests of the university and its faculty," said Neighbour. "Throughout the negotiation process, both parties have worked hard to minimize potential conflicts and to ensure that all will share appropriately in the benefits of this new relationship."
The company began here in St. Louis more than a year-and-a-half ago. The three professors incorporated Growth Networks in Missouri in December 1997 and sought funding for their ideas both locally and in the San Francisco bay area and in the Boston area. During these early days, the three founders were given valuable advice and were coached in the intricacies of starting a company by John McCarthy, partner in the Gateway Venture Partners, a local, Clayton, Mo. Second-stage venture firm. McCarthy also was a member of the original Growth Networks Board of Directors.
Less than a year ago, interest from Menlo Park venture firms grew, culminating in the funding of Growth Networks by NEA and IVP in November 1998. NEA has been investing in early-stage companies and working with management to nurture and build companies of lasting value. IVP manages over $1 billion in venture capital, which it has invested in a number of growing communications companies. Its goal is to invest in leading early-stage companies with advanced technology in information and the life sciences.
Work that the three Washington University computer scientists performed at the School of Engineering and Applied Sciences Applied Research Laboratory (ARL) on the fifth floor of Bryan Hall over the past decade serves as the foundation and springboard of the company. All three men have directed the ARL at various times since its foundation in 1988. Turner currently directs ARL; Parulkar is on University leave for two years to help run the Palo Alto branch of Growth Networks; and Cox, although a senior professor, no longer teaches but does direct two networking grants at Washington University. Most of his time since his retirement from the regular faculty is devoted to Growth Networks as vice president of strategic planning and board member.
The company is focused on designing, developing and marketing a new class of network communication products for the Wide Area Networking (WAN) market. Because the Internet and corporate networks are experiencing exponential growth there are many challenges facing service providers. There are predictions that the Internet could account for 90 percent of the world's bandwidth by 2003 and that traffic will increase by 8,000 fold over the next decade. This scenario drives the demand for network scalability and growth along with the need for reliable, high-capacity networks.
Growth Networks is concentrating on creating and delivering offerings that meet those market demands. Its technology and products are targeted at large Internet service providers, national service providers and carriers.
"The demand for networking technology and the advances of the Internet and other high-speed networks have progressed far more rapidly than we ever could have conceived in 1988, when the ARL was begun," said Cox, who co-founded the laboratory with Turner. "The Internet is currently doubling every 100 days. This can't be sustained forever without scaling up the equipment needed to carry all of the traffic and provide the many different applications. It's possible that the soda machine down the hall will be on the Internet, as well as the office copier and your automobile, to name just a few possibilities. So, there is a well-established need for the kinds of technology that Growth Networks can provide." Ron Bernal, formerly a senior executive at Silicon Graphics, is president and chief executive officer of Growth Networks Inc.
"The past decade has witnessed unimagined transformations in the data and telecommunications industries," Bernal said. "It is clear that the continued explosive growth of the Internet and related networks will impact the way information and services are provided to companies as well as individuals. We are developing and will deliver products that make it possible for Internet and telecom service providers to deliver the state- of-the-art platforms upon which the new millenium's Internet will be built."
Edward R. Fickensher, technology business development manager at Washington University, helped negotiate the terms of the license agreement.
"During negotiations, I was impressed with the professionalism and knowledge of Ron Bernal," Fickensher said. "I think that the partnership between him and our three inventors gives the company a high probability of success."
A linchpin of Growth Networks is Turner's internationally recognized expertise in the design and analysis of switching systems. He holds more than twenty patents on designs for high- speed switching systems.
"Creating scalable system designs is the key to building networks that can cost-effectively scale up to meet the Internet's growing requirements,' said Turner. "We've been able to design systems which are just as economical in very large configurations as they are in small ones."
Parulkar's research emphasis has been on high-speed"internetworking" with high quality of service guarantees. He and Cox and other ARL colleagues have developed a chip called APIC that allows computers to connect efficiently to high speed networks up to 1.2 gigabits per second (a gigabit is one billion bits).
Cox has been a faculty member at Washington University since 1955 and has been a major player in a number of key communications advances in telemedicine and other communications areas. Turner and Cox initiated a research project in 1988 with corporate telecommunications partners that created the technical foundation that has led to Growth Networks Inc. Called Project Zeus, the research was a prototype campuswide network with links to two of Southwestern Bell's St. Louis facilities. A high-speed, fiber-optic communications network, it transmitted voice, video, data and high-resolution images simultaneously at pioneering speeds.
Cox spends, on average, one week a month at the Palo Alto office, where Parulkar works with Bernal and a staff of 20 engineers. "This endeavor gives us the chance to have a bigger impact on the directions that products will go," said Cox. "I've been on the university side of technology transfer, even before I came to Washington University. I've seen lots of technology take off and become important. But I've always been curious about what technology transfer is like on the other side of the table. And now I'll find out."