iPolicy Picks Up $15M Series B

Startup iPolicy Networks today clinched $15 million in Series B funding to help spread its all-in-one network security message to enterprises and service providers.

The round was led by new backer Ignite Group and included existing investors Clearstone Venture Partners, The Entrepreneurs Fund, the WK Technology Fund, and iPolicy Networks’ chairman Prabhu Goel. Another new investor, Parawin Venture Capital, also took part in the round.

The Series B brings iPolicy’s total funding to $41 million, following a $26 million Series B in 2003. Arun Chandra, iPolicy’s CEO, tells NDCF the cash will go towards sales, marketing, and the firm’s partner push. ”We will be beefing up our sales forces, beefing up our marketing activities, and looking for OEM partners,” he says.

Founded back in 2000 by Goel, a former exec at IBM Corp. (NYSE: IBM) and Wang Labs, the startup has its eye on a growing part of the security market.

iPolicy’s flagship product is its Intrusion Prevention Firewall (IPF), which combines a range of different security features. These include URF filtering, firewall, and intrusion detection and prevention. The device first came onto the market aimed at service providers back in 2002, although an enterprise version was unveiled the following year.Chandra tells NDCF that iPolicy has racked up “three to four dozen” customers over the last three years, evenly split between enterprises and service providers. These include telecom giant AT&T Corp. (NYSE: T) and Japanese service provider Nifty, which use iPolicy devices for managed security services. Chandra was less forthcoming regarding iPolicy’s enterprise customers, although he confirmed that Lucasfilm is using the technology to secure its internal networks.

But iPolicy is not the only vendor touting a security God-box bristling with a range of features. A number of vendors, such as Fortinet Inc., Juniper Networks Inc. (Nasdaq: JNPR), and Cisco Systems Inc. (Nasdaq: CSCO), are offering all-singing, all-dancing security appliances (see Juniper Slots in More Security and Fortinet Fuses SSL & VOIP).

This is why OEM partners are important, according to former Hewlett-Packard Co. (NYSE: HPQ) exec Chandra. “You find partners that have the same kind of cachet that the other folks do, and you embed your technology within theirs,” he says, adding, “We’re in the process of finding them.”

The CEO says that iPolicy is already talking to “about half a dozen,” new enterprise and service provider customers, although he did not reveal their identities.

Chandra tells NDCF that he will also use the money to boost iPolicy’s presence in Asia, largely through partnerships. The startup is now looking to bolster its existing Japanese and Taiwanese operations with deals in Hong Kong, Australia, and Korea.Expanding into Asia should pose relatively few logistical issues for iPolicy. Although based in Fremont, Calif., about three quarters of the firm’s 120-strong workforce are located in Noida, outside of Delhi, India.

Chandra tells NDCF that there is one element of Indian culture clearly visible at iPolicy’s U.S. headquarters. Every Friday, the startup’s staff takes part in a cricket match in the shipping and receiving area at the side of their building. Does the CEO get involved? “Once in a while,” he says. “I am a fast-paced bowler -- I used to open [the bowling] for my high school team.”

— James Rogers, Site Editor, Next-Gen Data Center Forum