Round brings total funding to $47 million as startup plans to expand its backup offerings

February 22, 2006

3 Min Read
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Content delivery startup Netli has clinched $18 million in Series D funding to support its push from application delivery into backup and business continuity services. The round brings Netlis total funding to $47 million. (See Netli Gets $18M, Wins SAP Deal.)

Netli CEO Gary Messiana says he will be using the money to increase the firm’s headcount from 50 to 65 over the next couple of months, as well as extending its product set. “We’re expanding our offload capability, and we will be introducing new intranet products for small office and home office users,” he says.

Netli uses a network of 30 data centers dotted around the world to help users shift their Web applications to remote sites. It started life back in 2000, offering its flagship NetLightning portal as a way for users to deliver applications to diverse locations. (See Netli Scales Up .)

Over the last few years, Netli has expanded its offerings into backup and business continuity, recently opening a new data center in San Jose, Calif., where users can offload their files via the Internet. (See Netli Offers New Services and Netli Launches NetliOffload.)

According to Messiana, this so-called "Offload Center" is designed to help users keep pace with demand. “Customers often do not want to build out infrastructure to cope with peaks and troughs in demand,” he says. “During peak times they offload to us.”The exec says that Netli currently has three customers using the Offload Center, including semiconductor manufacturer Microchip, which has offloaded a total of 17,000 files, including maintenance files for customer self-help.

Netli already competes with the likes of Akamai and Savvis in the application delivery space, although the firm’s recent announcements also put it up against a slew of online backup vendors, including HP, IBM, LiveVault, and EVault.

Pricing will be key for Netli as it refines its backup story. A recent Byte and Switch Insider report warned that, in many cases, service providers are struggling to offer a convincing pitch that online backup services are cheaper than in-house backup and replication. (See Insider: Spend Wisely on Backup.)

Messiana won't comment on pricing, but confirms that Netli uses a monthly subscription model that varies with the volume of applications customers deploy.

In its favor, Netli appears to have attracted at least one major customer with its ability to work with existing applications. Ralf Kuhn, program director of services at software vendor SAP, is using NetLightning to deliver applications to 100,000 customers and partners on SAP's corporate extranet. Kuhn told Byte and Switch that NetLightning was chosen over Akamai's service primarily on account of its flexibility. “Akamai is also a good solution, but we would have had to change our application,” he explains. With Netli, he says, "There was no change necessary in our infrastructure and no change in our application. It was really plug and play.”Netli's round was led by Granite Global Partners and included Alta Partners, Bessemer Venture Partners, BlueRun Ventures, Leapfrog Ventures, Morgenthaler Ventures, and Reed Elsevier Ventures.

Future funding rounds are now unlikely, according to Gary Messiana. “We should get to cashflow break-even without going out for additional money." The startup should reach break-even sometime next year, he adds.

— James Rogers, Senior Editor, Byte and Switch

Organizations mentioned in this article:

  • Netli Inc.

  • Akamai Technologies Inc. (Nasdaq: AKAM)

  • Alta Partners

  • Bessemer Venture Partners

  • BlueRun Ventures

  • EVault Inc.

  • Granite Ventures LLC

  • Hewlett-Packard Co. (NYSE: HPQ)

  • IBM Corp. (NYSE: IBM)

  • Leapfrog Ventures

  • LiveVault Corp.

  • Morgenthaler

  • SAP AG (NYSE/Frankfurt: SAP)

  • Savvis Communications Corp.

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