Here's a new company to keep on your radar screen...
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Relicore scores $11M round
by Vyvyan Tenorio
TheDeal.com
Posted 05:44 PM EST, May-1-2002
Software startup Relicore Inc. began with the premise that there's a crying corporate need to conquer the overwhelming complexities of enterprise applications.
Touting that message, the Burlington, Mass. company emerged May 1 from stealth mode after 18 months of development with just more than $11 million in first-round funding.
Highland Capital Partners of Lexington, Mass., led the round with an $8.25 million investment, along with funding from potential customer Cisco Systems Inc. Gururaj Deshpande, founder and former chairman of Sycamore Networks Inc., also invested. Terms were not disclosed.
A classic venture capital web of connections came to bear in the deal. Highland general partner Paul Maeder said his firm knew Relicore founder Firdaus Bhathena from a previous investment in Webline Communications Corp., also of Burlington. Bhathena co-founded Webline in 1996 and sold it to Cisco for $325 million in 1999.
What's more, Cisco Wednesday signalled its return to acquisitions. It declared intentions to buy two private companies in which it already holds minority investments, Hammerhead Networks Inc. and Navarro Networks Inc., for about $258 million in stock, setting it up as a possible Relicore suitor as well.
Maeder described Relicore's management team, which includes two other Webline executives and Relicore co-founders, CTO Jeff Anuszczyk and marketing chief Blair Wheeler, in superlatives. "I think there is no better management team in the IT infrastructure space," Maeder said.
After Webline was sold, Highland backed Bhathena, president and CEO, as he developed a new business in the distributed enterprise systems management market which evolved into Relicore.
"About 80% of the downtime in an information technology application is spent in diagnosing the problem, and only 20% goes to applying the fix," Bhathena said. "You can't fix a car if you don't even know how the car is built."
Relicore's system automates the discovery, mapping and tracking process, enabling enterprise applications managers to analyze the interdependency of a bewildering array of applications distributed over local area and wide area networks. Thus, it's easier to repair problems, Bhathena said.
"IT managers are not looking for more applications — they've got enough," Maeder said. What they need, he added, is help in getting to know the parts of a whole.
The overall market for performance and availability management for distributed applications was roughly $4 billion in 2001, according to Tim Grieser, research director at Framingham, Mass., research firm IDC. Relicore is in a "pretty good" market niche now, he said.
While numerous established software vendors, such as Hewlett-Packard Co., IBM Corp., Computer Associates International Inc. and BMC Software Inc., already provide some such services, Grieser said Relicore "may be unique in terms of what it offers."
"Nothing competes directly with what they're doing, and I'm very confident about that," said Maeder, who is on the board.
With the money it received from investors, the company has built a product which is in test runs at a number of customer sites and due for shipping in the summer. The remaining capital will finance sales and marketing efforts, but the company expects to start raising another round toward the end of this year to expand product capabilities and sales, Bhathena said.
Mark Borden in Hale & Dorr llp's Boston office represented Relicore, while Testa, Hurwitz & Thibeault llp, also of Boston, advised Highland Capital. |
