Goodbye Tasman, Luminous — any other walking dead out there?

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.