Expand Gets $21M

Startup's total funding hits $74 million as the WAN optimization market heats up

May 1, 2007

3 Min Read
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WAN optimization specialist Expand Networks has picked up $21 million in its sixth round of funding and is now looking to grow its global presence.

The F round was led by new investor Vertex Venture Capital and Discount Investment Corporation. Existing investors Tamir Fishman Venture Capital and Challenge Fund-Etgar also participated, bringing the vendor's total funding to $74 million.

The round caps a busy period for Expand, which saw Elie Barr replace Zohar Pearl as the vendor's CEO and the acquisition of WAFS specialist DiskSites. (See Expand Snaps Up DiskSites and Expand Acquires DiskSites.) Last month, Expand also announced a partnership with Huawei-3Com (H3C), which will see routers from H3C (now completely owned by 3Com) equipped with integral WAN optimization from Expand later this year. (See Expand Signs With H3C, Expand Teams With H3C, China: Storage Superpower?, and Chinese Shockwaves.)

Expand CEO Elie Barr told Byte & Switch that a sizeable chunk of the F round will be used to increase the vendor's presence in Asia-Pacific, adding additional partners and improving sales support in China, Korea, and Australia. "It's a question of putting more flesh on the existing infrastructure," he says, adding that similar efforts are underway in Europe.

The vendor is also planning to grow its workforce from 150 to between 250 and 270 over the next 12 months. This will mainly be in areas such as R&D, sales, support, marketing, and managing OEM deals, according to Barr.The exec was a little less forthcoming on Expand's future product strategy, saying only that the vendor has "a fully blown" R&D roadmap.

Users are certainly on the lookout for enhanced optimization features, driven by the growing demand for online services. "HTTP optimization and SSL optimization will definitely be a priority and a focus over the short to medium term," says Rajan Kapoor, IT director at financial research firm Eurasia Group, which has deployed Expand WAN optimization and WAFS offerings at two of its three offices.

The exec, who is using Expand's Compass product to speed up the transfer of spreadsheets, PowerPoint presentations, and Word documents, told Byte and Switch that more and more firms are moving from in-house servers to hosted offerings. "As services continue to go online, optimizing access to that will be important," he says.

Some vendors have already made moves into this space. Riverbed, for example, already optimizes SSL traffic, although Expand is yet to add this to its portfolio. (See Riverbed Steps on SSL Gas.)

With the Series F round burning a hole in his pocket, Barr may soon turn his attention to this area. "We will be accommodating SSL," he told Byte and Switch, adding that HTTPS optimization is also on Expand's roadmap.The market for WAN optimization is certainly growing. According to Infonetics Research, sales of WAN optimizers grew 23 percent between the third and fourth quarters of 2006. Annual revenues rose 37 percent between 2005 and 2006. (See WAN Optimization Gone Wild.)

A number of vendors are jostling for pole position in this space, including Cisco, Riverbed, Packeteer, Blue Coat, Exinda, and Streamcore. (See Cisco Acts on Actona, Packeteer Picks Tacit, Peribit Deal: More to Come, and Streamcore Secures $7M.)

James Rogers, Senior Editor Byte and Switch

  • Blue Coat Systems Inc. (Nasdaq: BCSI)

  • Challenge Fund

  • Cisco Systems Inc. (Nasdaq: CSCO)

  • Expand Networks Inc.

  • H3C Technologies Co. Ltd.

  • Infonetics Research Inc.

  • Packeteer Inc. (Nasdaq: PKTR)

  • Riverbed Technology Inc. (Nasdaq: RVBD)

  • Streamcore System

  • Tamir Fishman Ventures

  • Vertex Venture Holdings

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