Israeli start-up Exanet recently raised $7 million. Most of the financing came from new investors, although existing investors also participated in the round. Exanet develops storage solutions.
Exanet cofounder Nir Peleg reportedly left the company a few months ago for an independent venture, for which he is seeking initial financing. Peleg and four other Exanet employees were the center of a legal battle, settled last year, between Exanet and Digital Appliance Storage Systems (formerly nSof).
Digital Appliance, financed by Oracle chairman and CEO Lawrence (Larry) Ellison’s investment fund, alleged that after moving to Exanet, Peleg headhunted other Digital Appliance employees for the company, resulting in Exanet obtaining intellectual property.
Exanet stated in response that Digital Appliance caused Exanet valuation to be cut by $13 million for its most recent financing round.
Digital Appliance filed a second suit, which was withdrawn after the two companies reached a compromise several months later, the details of which have not been disclosed. Exanet simultaneously withdrew its suit against Digital Appliance. Digital Appliance, now named Pillar Data Systems, later closed its Israeli development center.
Exanet cofounder, chairman and CEO Giora Yaron confirmed that Peleg had left the company. He declined to comment about the completed financing round, but said the company had recently made its first sales. Peleg was unavailable for comment, but associates confirmed that he was working on founding a new company.
Exanet was founded in 2000 by Yaron, a former CEO of National Semiconductors (Israel) and Indigo; Gigi Bar-Or, a founder of Sigal, sold to Cisco Systems (Nasdaq:CSCO) and Omega Band, which was spun off from it; and Amnon Strasser. Investors include Evergreen Partners, Intel Capital, Keppel TatLee Bank, Venture TDF of Singapore, Microdent (Eitan Wertheimer’s investment company) and private investors. Exanet had raised $27 million prior to the current round.
Exanet has 50 employees at its Herzliya development center and New York office. The company’s cash reserves, coupled with the present round, are expected to be sufficient for two years.
Published by Globes [online] - www.globes.co.il - on January 21, 2003