Altor Locks Down Series A For Virtual Security
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4/23/2008 - Redwood City, Calif. - As virtualization becomes an ever-larger part of data centers, Altor Networks Inc. has raised $6 million in Series A financing to develop and sell products that provide security to virtual environments.
Accel Partners and Foundation Capital co-led the round. The two firms also provided the company with just under $1.5 million in seed financing last summer, said Amir Ben-Efraim, the company's co-founder and chief executive. Ben-Efraim declined to disclose the company's valuation.
For over a year, security analysts and technology writers have touted security as an up-and-coming trend in the larger trend toward virtual data centers. The area has seen little activity among venture capitalists so far, but in the last month it has seen some product announcements from start-ups.
"Virtualization is fundamentally changing how security is going to work in the enterprise. [Altor Networks] has put together a great team to tackle this problem," said Ashmeet Sidana, a general partner with Foundation Capital and veteran of VMware Inc.
Virtualization opens a host of security problems with which traditional security offerings are not equipped to deal. For example, when several virtual machines are created on one server, virtual switches are used to allow the virtual machines to communicate, but traditional networking security products can't operate in the virtual network, Ben-Efraim said.
Also, virtual machines travel between physical servers, which can wreak havoc on existing firewalls and security policies, Ben-Efraim said.
Altor Networks released its first product, Virtual Network Security Analyzer, less than a month ago. This product gives an IT administrator visibility into a virtual network. Its second product, Virtual Network Firewall, which is slated for release this summer, will enforce policies and control in a virtual network.
The company has seen some competition from start-ups including Catbird Networks Inc., which is backed by angel-investment firm Lachman Goldman Ventures, and privately funded Montego Networks Inc., which released its first product just days after Altor's announcement.
Other venture-backed security companies, such as Blue Lane Technologies Inc. and Reflex Security Inc., the company that spawned Montego's founding team, have begun to introduce products that specifically address this market.
Altor Networks also expects to get more competition from legacy security vendors as they begin to think about how to adjust their products to serve this market, Ben-Efraim said.
The company sets itself apart from its competitors by focusing on the problem of firewalls in a virtual network and how to control communications between virtual machines. Most others have been more focused on intrusion prevention and malware, Ben-Efraim said.
The proceeds of the new round will be used to expand the company's sales and marketing efforts, as well as for increased research and development. The current team of 15 is expected to double over the next two or three months, Ben-Efraim said.
Ben-Efraim, Foundation Capital's Sidana, Accel General Partner Peter Wagner and Ulrich Stern, Altor's chief technology officer, serve on Altor Networks's board of directors.
Ben-Efraim and Stern, both former executives at Check Point Software Technologies Ltd., founded the Redwood City, Calif.-based company in March 2007.
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