Teneros Inc. wrapped up $40 million in Series D venture capital funding that will give it plenty of ammunition to go after small and medium-sized enterprises with its appliance that assures key infrastructure applications such as e-mail keep working, even if the network goes down.

With the economy slowing down, CEO Steve Lewis told Tech Confidential that Teneros wants to show it has a deep balance sheet and the resources to thrive even through a recession.

"It's well known that one of the biggest hurdles that startups face in selling to enterprises is convincing them that this relatively young company they're buying this technology from will be around to continue supporting it for the long-term," he said. "Should a recession kick in, startups will find the bar raised even higher as they go knocking on the doors of enterprise customers."

The new capital will enable five-year-old Teneros to continue targeting small to medium-sized businesses that do not require the hugely expensive, high-reliability networks maintained by large companies and specialized institutions such as banks. The strategy has worked well, as Lewis said that the company's top-line has been growing with revenues increasing by 50% quarter-over-quarter since 2006.

Late-stage investor Advanced Equities Inc. led the fourth round, joined by insiders New Enterprise Associates, Sevin Rosen Funds, STAR Ventures and Goldman, Sachs & Co.'s San Francisco-based venture arm. Teneros has raised a total of $84.5 million in venture capital. - George White

See Feb. 4 press release from Teneros
See April 2006 story from TheDeal.com