Mendocino Scores $15M

In an odd turnabout, software startup acquires technology, then gets funded

April 2, 2004

3 Min Read
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Mendocino Software, a startup specializing in application recovery, has gotten $15 million in first-round funding, ensuring ongoing development for its standing customers (see Mendocino Software Gets $15M).

You read that right. Mendocino Software already has a small roster of users in enterprise and federal government sites. In an unusual model, the company's founders and backers planned a strategy, found a company willing to sell the basic technology they required, and then got funding to move forward.

Let's start at the top. Last March, Mendocino began as a project in the incubator program of venture firm Mayfield. With input from Mayfield managing director Peter Levine, a former senior executive at Veritas Software Corp. (Nasdaq: VRTS), and Prashant Dholakia, another Veritas vet, a small staff researched the storage software market for hot opportunities.

They focused on application recovery. Instead of building from scratch, they looked for existing software to jumpstart their company. They found Reston, Va.-based Vyant Technologies, whose product, RealTime, is server-based software that tags application "write" requests as they occur, then stores them for reference on a separate server. This allows users to retrieve exact copies of applications by specifying a point in time -- down to the day, hour, minute, and second.

According to Mendocino, Vyant sold its intellectual property and assets to Mendocino in return for ownership in Mendocino -- specific terms undisclosed. Mendocino VP of marketing John Wernke says a handful of software architects from Vyant are now working with Mendocino as part of its 30-odd workforce. Vyant continues to function as a corporation and hasn't changed its Website. A Vyant spokesman didn't return a phone call at press time.RealTime competes with similar software from the likes of Alacritus Software Inc. and Revivio Inc. Wernke says it uses a series of "undo" commands to locate the exact iteration of an application at a given point in time, so it's most practical for retrieving data lost within the last 24 hours to a week. Since it can be cumbersome to find an exact copy of a recently lost application using the restoral capabilities of a full-scale backup program, RealTime can fit well as a complement to a firm's backup tools, Wernke says.

With Vyant's RealTime and its customers under its belt, Mendocino Software firmed up its funding, which was led by Mayfield and Accel Partners. Other investors include Advent International and Foundation Capital.

Other changes: Dholakia's gone, and Peter Levine's taken the helm as CEO, even though he continues to be a managing director at Mayfield. Joining him are a roster of storage networking industry veterans: president and COO Steven Colman, a former CTO of Nishan Systems Inc., who departed that company in a huff last year (see Nishan CTO Cuts Out); and CTO Jeff Rothschild, a founder of Veritas, who now works at Accel as well.

Mendocino's $15 million will go into product development and partnerships, among other things. On the product side, Wernke says it's important to start working on the software's planned differentiators, which include tight integration with applications, enabling more streamlined recovery of data. That integration will require close partnerships with companies that make key corporate applications, such as Oracle Corp. (Nasdaq: ORCL).

The company had best get on with it. The market's not standing still, and besides software-only competitors, Mendocino Software faces a growing roster of vendors like Storage Technology Corp. (StorageTek) (NYSE: STK) that deal in continuous data protection as part of their own hardware (see StorageTek Hears an Echo}.Mary Jander, Site Editor, Byte and Switch

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