VCs investing in cloud "data explosion"

SAN FRANCISCO (Venture Capital Journal) - Another cloud-related startup has scored funding from investors.

Zetta Inc. announced this week it has raised $11.5 million in a Series B round from venture capital firms Foundation Capital and Sigma Partners. That is on top of the nearly $11 million Series A round Zetta raised in August 2008 from Foundation and Sigma, when the cloud-storage services provider was founded.

All four co-founders, who previously worked together at Shutterfly, are still with Zetta, which boasts about 100 customers, including a well-known Silicon Valley law firm and the UCLA Computer Science Department.

In the last couple months, a number of cloud-related companies have raised capital, including Aryaka Networks (which raised $14 million in a Series A round from Mohr Davidow Ventures, Trinity Ventures, Nexus Venture Partners and Stanford University), StorSimple (which raised a $13 million Series B round from Mayfield Fund, Index Ventures, Ignition Partners and Redpoint Ventures) and Cirtas Systems (which raised $10 million in an oversubscribed Series A round from New Enterprise Associates, Lightspeed Venture Partners and Amazon).

Zetta CEO Ali Jenab, who joined the company about a month ago, said that what’s driving the surge of interest in the cloud is what he calls “the dynamic shift in bandwidth usage,” as more enterprises, both large and small, in addition to a growing number of consumers, are storing emails and other files in the cloud.

“There’s a data explosion going on, and that’s what’s driving so many startups focused on security and storage infrastructure,” Jenab said.

In addition to Zetta, here’s a select list of venture-backed companies to raise early stage funding rounds last week:


Cloud Sherpas

Atlanta, GA

Amount/Round: $1.6 million/Series A

Investors: Syncarpha Capital, Vento Security Holdings and Hallett Capital

Details: Operates as a cloud computing company. Hallett Capital is the investment arm of CEO Jon Hallett, who said that the company reached profitability “several months ago.”



Seattle, WA

Amount/Round: $800,000/Series A

Investors: Angel investors, including 500 Startups, Founders Fund, Jeff Clavier, Founders Co-op, Geoff Entress and Naval Ravikant

Details: Operates a real estate search site. The company currently lists homes in Seattle, Portland, San Francisco, Sacramento, Los Angeles, San Diego, Chicago, Long Island, Washington DC, Baltimore, and Atlanta.


New York, NY

Amount/Round: $2.1 million/Series A

Investors: Battery Ventures and undisclosed angel investors

Details: Operates a locally focused flower delivery subscription service. Earlier this year, the company raised $1.1 million from angel investors. The company launched its services in New York this year and is expanding next to Washington, D.C.


Rocket Ninja

San Francisco, CA

Amount/Round: $3.5 million/Series A

Investors: Undisclosed angel investors

Details: Company, which is in stealth mode, is developing games for social networking sites.



Phoenix, AR

Amount/Round: $7.5 million/Series A

Investors: Canaan Partners (led), CHL Medical Partners and undisclosed individual investors

Details: Operates a cloud-based platform for medical imaging management.


Electrolytic Ozone

Boston, MA

Amount/Round: Undisclosed/Series A

Investors: E6 Ventures

Details: Develops compact ozone generators for health, food safety and medical uses. The company recently spun out of supermaterials supplier Elements Six Ltd.

Virtual Incision

Lincoln, NB

Amount/Round: $2 million/Series A

Investors: PrairieGold Venture Partners and Bluestem Capital

Details: Develops robotics used in laparoscopic surgery. Co-founders Shane Farritor and Dmitry Oleynikov are professors at the nearby University of Nebraska.


Callaway Digital Arts

New York, NY

Amount/Round: $6 million/Series A

Investors: Kleiner Perkins Caufield & Byers led the round through its Apple-focused iFund. Sherpalo Ventures founder Ram Shriram and Zynga CEO Mark Pincus also invested

Details: Publishes interactive applications for the iPad, iPhone and iPod.

Red Foundry

Chicago, IL

Amount/Round: $1.1M/Series A

Investors: OCA Ventures and I2A Fund

Details: Provides technology that allows users to develop mobile apps. The company is using its funding to expand its staff and to launch its technology, which is currently in beta testing.


Neato Robotics

Mountain View, CA


Amount/Round: $3.7 million/Series A

Investors: Undisclosed

Details: Makes robotic vacuum cleaners. The funding, according to a regulatory filing, is part of an effort to raise about $14 million.