Greylock Partners joined a crowded roster of venture capital backers in providing Zend with $20 million in fourth round funding. The funding is based on the recent explosion of dynamic Web sites that use software made by Zend, a computer language creator and open-source vendor.

Founded in 1999, the company has raised $15 million in three previous rounds from Walden Israel Venture Capital, Platinum Venture Capital, Azure Capital Partners, Index Ventures, Intel Capital and SAP Ventures.

The Deal's Paul Bonanos spoke with Zend co-founder Andi Gutmans about the new VC round:

Gutmans would not discuss Zend's current valuation, but he described the new funding as "a good round for Zend." He said the company shopped the deal minimally, preferring to target key Silicon Valley investors through stakeholders.

"Over the past two years, PHP adoption has accelerated immensely. We're seeing much less Java, and more PHP." He added that government policy in several European countries favors open-source technology over proprietary software, prompting additional interest in companies such as Zend.

Unlike other open-source companies, Zend's primary revenue streams do not come from support and consulting, although the company performs both those tasks. Zend remains a vendor of premium add-on software products, used by companies that publish what Gutmans termed "industrial-strength" Web sites. He said between 15,000 and 20,000 customers deploy Zend's products.

Gutmans said that unlike publicly traded Linux distributor Red Hat Inc. of Raleigh, N.C., and its application server division, JBoss, Zend does not aim to make PHP a commodity software product. He said Zend has "some overlap" in the programming market with Java, developed by Sun Microsystems and Microsoft's ASP.Net systems, though Zend has virtually no peer in the area of PHP. The startup also maintains key strategic partnerships with IBM and Oracle.

Zend has never released revenue figures, although Gutmans said its year-over-year growth has typically been between 70% and 100%. The company was briefly profitable in 2003 after cutting costs, but it expects to operate at a loss for at least a year while investing in its future.

Tags: zend, web2.0, php, greylock,intel, sap, vc, venture+capital.