Million Dollar Babies: Cloud Startups Get Big Funding Bumps

Cloudy Cash Injections

Cloud computing is hot and venture capitalists and other investors are hot on the cloud, pumping millions of dollars into young cloud companies looking to hit with the next big thing. With Forrester predicting that cloud computing will be a $241 billion business come 2020, there will be plenty to go around, and investors are getting in on the ground floor with strategic investments in cloud startups and young vendors. Here, we take a look at 10 cloud startups that have come off of multi-million dollar funding rounds this month.


Palo Alto, Calif.-based ScaleXtreme took in $11 million in a Series B funding that closed earlier this month. The charge was led by Ignition Partners with participation from previous investor Accel Partners. According to ScaleXtreme, a cloud-based systems management company, it will leverage the cash infusion to speed up the rollout of new product capabilities and expand its sales and marketing campaigns around managing hybrid clouds. ScaleXtreme helps administrators and MSPs manage and configure cloud infrastructures on services like VMware virtual machines and Amazon EC2. The $11 million in funding comes after a $2.5 million investment from Accel Partners last year.


Aryaka, a cloud WAN optimization-as-a-service startup took in a whopping $15 million in Series B funding this month, with investments from Trinity Ventures, Mohr Davidow Ventures and the round's leader, Nexus Venture Partners. The Milpitas, Calif.-based company said it will leverage the new-found funds to build out awareness of its SaaS-based WAN optimization platform, which the Aryaka claims offers less than 20 milliseconds of latency for 90 percent of the world's users of business internet. The $15 million Series B round comes after the three-year-old company received a funding boost of $14 million during a Series A round in September.


Cloud financial management and accounting software upstart Intacct picked up an additional $12.3 million in financing in June in a round led by Split Rock Partners, a venture capital firm that focuses on emerging software and Internet services companies. Other investors, including Bessemer Venture Partners, Emergence Capital, Sigma Partners and Sutter Hill Ventures also participated. According to San Jose, Calif.-based Intacct, the company will leverage the funds to fuel an aggressive hiring plan and accelerate growth. The company recorded 250 percent year-over-year growth in the third fiscal quarter 2011, a boost that included a ten-fold year-over-year increase in new business driven through the VAR channel.


Santa Clara, Calif.-based cloud storage startup StorSimple nabbed $10.5 million in Series C funding this month, led by Ignition Partners with other investors including Index Ventures, Mayfield Fund, and Redpoint Ventures, participating. Since launching in 2009, StorSimple has now raised a total of $31.5 million to fuel its cloud-based data storage software. The company said its purse will be a catalyst for the growth of the company, which has seen significant demand increases in the U.S. and internationally.

Cloud9 IDE

Cloud9 IDE, a cloud application development startup, raked in $5.5 million in its first funding round with Accel Partners and Atlassian Software leading the charge. Cloud9 IDE is a cloud-based programming environment for developers to build and run Web and mobile applications in JavaScript and HTML5. The Cloud9 IDE service, which the company calls DaaS (Development-as-a-Service) is hosted in the cloud to let developers access, build, edit, test, debug and share projects. The company said it will use the cash infusion to add new features like language analysis, auto-complete, Google Docs-style multi-user collaboration, and support for other programming languages. Cloud9 IDE, which has a U.S. headquarters in San Francisco, also plans to bulk up its staff.


From Sunnyvale, Calif., cloud-based acceleration player Cotendo completed a $17 million private funding round the company plans to use to fuel its long-term growth strategy and continued technology innovation. It will also be used to bulk up Cotendo's global presence and push it into new markets, the company said. The $17 million investment came from Citrix Systems and Juniper Networks, through its Junos Innovation Fund, and from existing venture backers Sequoia, Benchmark and Tenaya Capital. Cotendo provides Web and mobile acceleration services and technologies that enable Web site operators and large enterprises to improve Web performance and simplify content delivery management.

Ping Identity

Denver-based cloud security company Ping Identity brought in $21 million during its second round of funding this month, money the company says will be used to beef up product development for its cloud identity management offerings and boost sales efforts. Investors included Triangle Peak Partners, Silicon Valley Bank, and existing investors Appian Ventures, Draper Fisher Jurvetson, General Catalyst Partners, SAP Ventures and Volition Capital. The 9-year-old company makes tools that it says secure companies' identities in the cloud including PingFederate, a cloud identity management play, and PingConnect, a public cloud offering.


Bromium came out of stealth mode this month at the Structure conference in San Francisco and announced that its first funding round brought in $9.2 million from high-tech investors Andreessen Horowitz, Ignition Partners and Lightspeed Venture Partners. Founded by a trio of tech powerhouses -- Gaurav Banga, formerly of Phoenix Technologies Ltd.; and Simon Crosby and Ian Pratt, formerly of Citrix Systems -- Bromium focuses on two key trends dominating IT: consumerization and cloud computing. The company said its virtualization technology will be a key driver. Bromium plans to use the funding to develop technologies that will help build a trustworthy computing infrastructure amidst the increase in consumer-driven devices, applications and networks; and the vulnerabilities introduced by cloud computing. The Cupertino, Calif.-based company is expected to launch a product in the second half of 2011.


Macheen, a global cloud service provider for connected devices, landed $10 million in Series B funding to build on its market entry. North Bridge Venture Capital led the funding, with Macheen's existing investors, including DJF Mercury, and angels and industry figures Tom Meredith, Mike Maples Sr. and Yachiam Yemini participated in the financing round. Macheen's multi-tenant, cloud-based platform supports new business models for device makers, retailers, cloud service providers and network operators. The company enables connected device makers and retailers to deliver products that are shipped pre-connected to the Internet via mobile networks.


Cloud-based identity and access management provider OneLogin closed a $1.5 million Series A funding round this month led by Charles River Ventures. According to the company, it will use the funds to beef up its engineering, sales and product development initiatives. Los Angeles-based OneLogin can be sued to extend corporate directory infrastructure into the cloud and leverage similar control as when data resided behind the firewall. OneLogin allows centralized access control, security policy enforcement and automated user management in target applications with a full audit trail for compliance and reporting.