Neoteris completed a $17.5 million financing round from existing investors last week - and what investors: Battery Ventures led the round with a $11.5 million investment; The Barksdale Group; New Enterprise Associates (NEA); and private investors, including Netscape chairman Jim Clark. The Barksdale Group is the investment fund of former Netscape executive Jim Barksdale. Netscape meanwhile announced a few months ago that it would cease investing in new companies. Neoteris’s value for the round was reportedly higher than for its previous round in January 2002.
Neoteris’s instant virtual extranet (IVE) product is a secure virtual private networks (VPN), based on secure sockets layer (SSL) protocol. The company claims its solution provides a faster connection between the remote surfer and the company database than existing solutions. The software uses Intel (Nasdaq:INTC) servers located in the business’s network that enables access through a browser. The expectation is that the need for secure VPNs will grow proportionally with the expansion of wireless networks that provide employees located outside in cafes, airports, and the like with access to enterprise databases.
Neoteris’s four founders, VP product management Sam Srinivas, CTO Theron Tock, principle engineer Surya Koneru, and director of engineering Shyam Davurulu, originally called the company DanaStreet, after the café where they met to discuss founding the company. They changed the name in September 2001. Neoteris has raised $37.5 million to date, and burned $11 million. It currently has 120 employees.
Neoteris claims it has 250 paying customers, including Merrill Lynch and Deutsche Bank, and 60 Fortune 1,000 companies. Its competitors are small companies, including Nettila, Array Networks, SafeWeb, AppGate Network Security, and uRoam, as well as Check Point (Nasdaq: CHKP), Cisco Systems (Nasdaq:CSCO), NetScreen Technologies (Nasdaq:NSCN), Nortel Networks (Nasdaq:NT), and Symantec (Nasdaq:SYMC), which provide IP-based VPN (IPsec VPN).
Aventail, another SSL-VPN competitor, postponed a planned IPO in 2002, raising $55 million instead. Aventail announced a huge deal with AT&T (NYSE:T) two weeks ago to provide secure access services for AT&T customers.
Published by Globes [online] - www.globes.co.il - on March 31, 2003