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Teneros Tucks In $40M

Startup Teneros of Mountain View, Calif., has scored $40 million in Series D funding from a range of investors -- the largest round so far awarded to a data protection startup this year. The round, led by Advanced Equities Inc., included Goldman Sachs, NEA, Sevin Rosen Funds, and STAR Ventures. It brings Teneros's total funding to $84.5 million.

CEO Steve Lewis, who founded Teneros in 2003, says he'll use the money to support what he claims is 50 percent quarterly growth. With 92 employees and just over 300 customers, he's aiming to solidify Teneros's position with enterprise customers as well as the SMBs that initially popularized the startup's wares.

"This round was as much about making a competitive and financial statement as it was about funding," he says. Lewis claims Teneros is "very close" to being profitable. But a big investment inspires confidence in enterprise customers, he notes. And it protects against the possibility the VC well might run dry in case of a U.S. recession -- something Lewis, for one, is worried about.

Further, he believes the new round will help keep competitors at bay, at least for awhile. VCs looking to boost other companies in the Exchange continuity space had best think twice, in his view: "Others might look to invest, but they'll have to raise a boatload of cash to come after us!"

Teneros's stock in trade is its Application Continuity Appliance for Microsoft Exchange, which was unveiled in March 2005. The box sits alongside a Microsoft Exchange server (one per Exchange server is required), sifting for corrupted data and then replicating Exchange in the form of message objects such as tasks, calendar items, or emails. The objects are placed in Teneros's own specialized instantiation of Exchange. Remote monitoring and updating by Teneros take care of management functions and make each box a "forgettable" item in the data center.

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