Neartek Scores $8M Round

Tape virtualization player Neartek Inc. has received an additional $8 million in funding, as it looks to expand its sales and marketing efforts in the U.S.

The Westborough, Mass.-based company received the additional funding from existing investors Benchmark Capital, Doughty Hanson Technology Ventures, and Magnum Telecom.

The cash infusion comes after Neartek received $27 million in April 2002 from the same group of VCs, which was a down round as the company restructured its financing (see Neartek Lands $27M). Under its previous management, when the company was focused solely on the mainframe market, Neartek had raised $40 million.

Neartek says the new funding will be used to expand U.S. sales and marketing efforts; to continue to support its international customer base; and to expand the company's European presence for its Virtual Storage Engine (VSE) virtual tape software solution.

Founded in 1994, Neartek sits in a specialized niche in the storage software market: Its software acts as middleware between tape drives and storage devices, backup applications, and servers -- eliminating the need to have dedicated tape drives and libraries for each computing platform.Other companies in this space include Diligent Technologies Corp. -- which earlier this year spun off from EMC Corp. (NYSE: EMC) -- Storage Technology Corp. (StorageTek) (NYSE: STK), and IBM Corp. (NYSE: IBM). (See Diligent Cracks Open.)

Neartek's customer base is predominantly made up of European companies and government agencies -- which explains why it's interested in stepping up its visibility stateside. "Aside from the French government, I don't know who they sell to," says Neville Yates, CTO of Diligent.

Well, Neartek does have a few others. In addition to France's Ministry of Finance and other agencies, its customer roster includes BNP Paribas, a French bank; Oc, a printing and document imaging vendor based in The Netherlands; and Scania, a Swedish automaker.

— Todd Spangler, US Editor, Byte and Switch