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Zambeel Lands $52.6M

Why is a router company in on this one?

Virtualization startup Zambeel Inc. has won $52.6 million in second-round funding, which it says will see it safely through 2002, including the release of its storage appliance by year's end 2001. The round, which includes a surprise investment from Juniper Networks Inc. (Nasdaq: JNPR), brings Zambeel's total funding to $65 million (see Zambeel Cops $52.6 Million).

Zambeel plans to use the funds to bulk-up its sales and marketing operations, increasing its total headcount from 120 today to 160 by the end of 2002.

Amerindo Investment Advisors Inc. and Aurora Technology Fund

jointly led this round, which includes investments from Armada Venture Group, Integral Capital Partners, Juniper Networks, Merrill Lynch & Co. Inc., Mitsui Corp., Morgan Keegan & Company Inc., and Sands Brothers & Co. Ltd. Kleiner Perkins Caufield & Byers and New Enterprise Associates (NEA), the two venture capital companies that participated in the first funding round for Zambeel, also participated in this one.

Investors continue to back companies with a strong product in a real marketplace,” says Darren Thomas, president and CEO of Zambeel. “Even though the storage sector is subdued right now, it continues to outperform all the other technology markets.”

The most newsworthy element of this investment round, apart from the obvious Who’s Who list of top-tier VCs, is Juniper’s participation. According to Thomas, Juniper has big plans to target the storage-over-IP market, particularly as gigabit Ethernet gains traction in the sector (see Gigabit Ethernet: Hope vs. Hype).

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