Allegro Networks closing down

The three-year-old telecom slump has claimed yet another young company. Edge router start-up Allegro Network is closing its doors after laying off 89% of its staff this week.

Allegro could not generate revenue or additional funding to keep afloat, says Dave Ginsburg, Allegro vice president of marketing.

Allegro started the week with 70 employees. At the end of today, it will be down to eight who will concentrate on selling off assets and intellectual property, Ginsburg says.

Allegro is looking to place groups of engineers and intellectual property in some of the larger companies as groups, Ginsburg says. The company’s operations in India will most likely transfer intact to another company, he says.

Allegro was founded in January 2000. At its peak, the company employed 185. It was headed by Chief Executive Dave House, former CEO of Bay Networks and president of Nortel Networks.

Allegro was developing a so-called “multi-router” – several module-sized routers, each with dedicated route processor, memory, and a discrete version of the operating system – that fit into a single enclosure.

Multi-routers were pitched as a unique way for services providers to offer and purchase managed routing services or lease physically distinct routers. Allegro proposed them as an alternative to virtual routers – several routing domains sharing a single CPU, a single bank of memory, a single software image and a single management plane – for providing such services.

Two major IXCs and a partner in Japan on behalf of a Japanese carrier were trialing the multi-router, Ginsburg says. The product was scheduled to be available in the first half of this year.

Allegro attracted more than $89 million since its founding from Bessemer Venture Partners, Columbia Capital, Infinity Capital, Thomas Weisel Venture Partners, Rustic Canyon Group and WK Technology Fund.