Linuxcare secures new funding:
news.cnet.com
Linuxcare looks to future with new financing
By Stephen Shankland
Staff Writer, CNET News.com
August 2, 2000, 11:15 a.m. PT
Struggling Linuxcare has received $30 million from Lehman Brothers and several other
investors, enough to carry the company to planned profitability in the fourth quarter of 2001, the
company said.
As previously reported, the funding is a necessary endorsement to help the company pull back from its
troubles and regain its status as one of the original start-ups to try to make money off the Linux operating
system.
Linux is available for free or at a very low cost, but Linuxcare, Red Hat, VA Linux Systems and others
hope to make money selling services and support for the software.
The San Francisco company was hit by a succession of problems earlier this year, including the
departures of its chief executive and chief information officer, layoffs, a postponed initial public offering, and
cooling investor enthusiasm for Linux companies.
New investors include Itochu International, Charter Ventures' Charter Growth Capital and an affiliate of
Sands Brothers.
"This is a validation of the business model," chief technology officer and cofounder Dave Sifry said in an
interview today.
Though the company laid off numerous employees this year, the company still has about 200, including
its prized collection of open-source programming gurus. "We didn't lose one," chief financial officer Chris
Paul said.
The company still plans an IPO, but that won't occur until after this year, Paul said.
The company is interviewing chief executives, Paul added. "It's taking longer than we'd
like, but the key thing is getting the right person in here," he said.
Earlier investors, including Kleiner Perkins Caufield & Byers, Patricof & Co. Ventures,
Dell Ventures, Motorola and Sun Microsystems also invested in the newest funding
round, Linuxcare said. |
