Applications acceleration solutions developer Cotendo Inc. has raised $17 million financing round from its current investors, venture capital firms Benchmark Capital, Sequoia Capital and Tenaya Capital and two large strategic investors, Juniper Networks Inc. (Nasdaq: JNPR) and Citrix Systems Inc. (Nasdaq: CTXS). The company will use the proceeds to expand operations and sales in the Asia-Pacific and Latin American markets and to further development of its products for mobile and web applications.
Cotendo was founded in 2008 to develop encrypted content delivery network (CDN) and site acceleration solutions to improve the performance of websites and large enterprise networks and simply content management. The service is offered by cloud computing technology. Customers include leading telecommunications carriers, e-commerce companies, advertising networks, and social networks.
The company is headquartered in Silicon Valley and has an R&D center in Netanya. The company has raised $39 million to date.
Cotendo CEO Ronni Zehavi said that in order to continue the company's rapid growth, it has decided not to reach the operating break-even point, but to boost expenditures to increase the number of customers. "The company has 50 paying customers, including Facebook, Zinga, MyYearBook, Israel's ConduIT Ltd., Vistaprint, and Bayer."
Cotendo is also is being sued for patent infringement by Akamai Technologies Inc. (Nasdaq: AKAM), which dominates the content acceleration solutions market. Zehavi says that the legal proceedings do not take up much of the company's time, but that it will likely last for a long time. He says, "Akamai is a major competitor. We offer service with better performance, fewer servers, and the added value of more functionalities. Akamai is also known as a company that is quick to file lawsuits against other companies."
Cotendo sells directly and through a cooperation agreement with AT&T Inc. (NYSE: T). Zehavi says, "They sell our systems, which are installs at its customers."
Cotendo also announced the launch of a new platform for mobile networks that give carriers a tool to accelerate Internet content.
Published by Globes [online], Israel business news - www.globes-online.com - on June 15, 2011
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