[Posted on January 28, 2008 - 5:00 PM]
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Investor demand for virtualization tech may have cooled somewhat, as Virtual Iron Software opted to stick with insiders in a new $20 million venture round, bringing total investment in the 5-year-old company to $65 million.In announcing the funding, Virtual Iron pointedly noted that the deal came at an increase in value. With heavy-hitting financial and strategic investors including Highland Capital Partners, Matrix Partners, Goldman Sachs, Intel Capital and SAP Ventures, it's not as if the company needed any more help at the board level. Still, with stock in last year's hottest software IPO, VMWare Inc. [VMW], down nearly 40% from a peak last November, insider calculations on bringing in new money before a likely exit in Virtual Iron's next round may have been influenced by current market conditions.
Virtual Iron even compares itself to VMWare in announcing the new investment, claiming greater ease of use. CEO Ed Walsh also claims Virtual Iron is growing faster than the overall market, which is exploding as enterprises seek to wring more processing power out of existing infrastructure with all kinds of server and application virtualization technology. Although it doesn't disclose revenues, the company claims dramatic growth in the last 12 months, while noting that the server virtualization software market is growing 60% per year and is projected to reach more than $9 billion by the year 2012, according to IDC.
In backing the insiders' round, Intel is continuing to bet on a stable full of horses in the virtualization race, having also invested in 3Leaf Systems Inc. and Swsoft Inc. - Clifford Carlsen
See Jan. 28 press release from Virtual Iron
See April 2007 story from TheDeal.com
For more on Virtual Iron and VMWare see the SearchStorage.com blog
