Secret Security Startups Score Cash

Stealth-mode startups rack up nearly $30 million to support the launch of LAN security devices

July 19, 2005

4 Min Read
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Stealth-mode startups ConSentry and Nevis Networks both announced venture capital funding and new hires today as they set about building devices to secure the local area network (LAN).

ConSentry clinched $17 million in a Series C funding round and lured a bunch of new executives from Juniper Networks Inc. (Nasdaq: JNPR), Cisco Systems Inc. (Nasdaq: CSCO), and Extreme Networks Inc. (Nasdaq: EXTR).

Existing investors Accel Partners and Sequoia Capital were involved in ConSentry's round, along with new backer Invesco Private Capital. The cash influx bring ConSentrys total funding to $31 million.

Fellow Californian startup Nevis completed a $12.5 million follow-on to its Series B round, which included input from New Enterprise Associates (NEA), Blue Run Ventures, and New Path Ventures, and announced a new CEO (see Nevis Names CEO, Gets $12.5M).

At this stage, both firms are playing their technology cards close to the vest, though Faizel Lakhani, ConSentry’s vice president of marketing, told NDCF that the Milpitas, Calif.-based firm will launch its first product in the third or fourth quarter of this year. “It’s basically an in-line device that controls what users can do on the network, such as what applications they run and what resources they are allowed to access.”Lakhani adds that ConSentry is using custom silicon for the device, which he describes as a secure local area network (LAN) controller. “There’s a number of custom chips that we have designed ourselves,” he adds.

But ConSentry faces some stiff competition in this part of the market, not least from big hitters such as Cisco, Juniper, 3Com Corp. (Nasdaq: COMS), and Check Point Software Technologies Ltd. (Nasdaq: CHKP). (See Chambers Sells Self-Defending Networks, 3Com Makeover Features Security, and Check Point Unveils New NGX Platform.)

Lakhani admits the internal LAN is very much Cisco’s “home space” at the moment, but expects to win market share based on the number of features ConSentry will offer on its yet unnamed device. “Some customers are very receptive to this,” he adds. “This is not a device that forces a rip and replace of your existing network.”

Nevis is also building its own LAN device using custom silicon. However, Charles Dauber, the new CEO drafted from Blue Coat Systems Inc. (Nasdaq: BCSI), is even more tight-lipped. All Dauber would say is that the startup is looking to offer perimeter-style network security within the LAN.

Typical perimeter security includes the likes of firewalls, intrusion and prevention systems, and encryption technologies. Nevis will take "the appropriate" technologies and use them to create what Dauber describes as a "personal demilitarized zone (DMZ)" that will go between the user and the corporate network. "Everyone has their own personal DMZ keeping them safe from the network and the network safe from them," he adds. Nevis will be making an announcement about its long-term roadmap later this year.Success for both firms hinges on their ability to lure users. As a result, most of today’s funding will go towards helping ConSentry boost its channel presence, according to Lakhani. Like many startups, ConSentry is opting for channel partners rather than taking the costlier route of selling direct to customers. ConSentry has already signed up around 20 channel partners, according to Lakhani, although he would not go into specific detail on this.

ConSentry has also managed to lure a number of execs from its competitors, it announced today. Dean Hickman-Smith, the former vice president of emerging technologies at Juniper, has joined ConSentry as vice president of worldwide sales. Franklin Grosvenor, who was senior director of manufacturing at Cisco’s wireless networking group, has also come on board as vice president of operations. Another new addition is Sam Farsad, the former vice president of software engineering at Extreme, who is now ConSentry’s vice president of engineering.

These new hires bring ConSentry’s total workforce to around 60 employees, although this figure is expected to grow by as many as 20 within the coming year.

What about customers? Lakhani told NDCF that the startup is now starting its beta program, working with a “number of customers” in areas such as finance, insurance, the pharmaceutical industry, and high-tech research.

Is another round likely anytime soon? “This round will take us quite a way into the future,” says Lakhani. “It will take us to the beginning of 2007, we will decide what we want to do at that point.”ConSentry was founded in August 2003 by Jeff Prince, the co-founder of Extreme Networks, and Mario Nemirovsky, who also set up network processor specialist XstreamLogic, Inc. Prince is now ConSentry’s chairman and chief technology officer, while Nemirovsky serves as the firm’s chief scientist.

Santa Clara, Calif.-based Nevis was set up in 2002 by former Cisco exec Amol Mahajani and one-time Juniper exec Manish Muthal. Mahanji is now Nevis's director of software development and Muthal is the startup's director of ASIC development.

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

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