Datallegro Secures $6 Million in Venture Capital
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Data Warehouse Appliance Provider is Funded by Venrock Associates and Palomar Ventures
SAN DIEGO--(BUSINESS WIRE)--Aug. 9, 2004--Datallegro, supplier of the premier price/performance data warehouse appliance, today announced that it has secured $6 million in Series A venture capital funding. The money will be used to launch the company and bring the product to market. The funding round was co-led by top venture capital firms Palomar Ventures and Venrock Associates.
"CIOs and IT Managers for many large companies are realizing their current data warehouses won't be able to handle the rapid growth of their data and they are looking for help," said Stuart Frost, CEO of Datallegro. "We can help them to enhance their existing data warehouse infrastructure so that it can keep up with the growth of their business. Best of all, our patent-pending technology allows us to offer this solution for about the same cost as an Oracle platform upgrade."
"We see many business initiatives on a daily basis. Datallegro stood out as having a compelling combination of experience, market need, expertise and breakthrough technology," said Brian Ascher of Venrock Associates. "We are very excited about the opportunity and are looking forward to being a part of the company as it grows and thrives."
Randy Lunn of Palomar Ventures said: "Palomar Ventures is pleased to be a part of Datallegro moving forward. We believe Stuart's market-technology insights and nimble entrepreneurial instincts, coupled with the entire team's energy and balance of skills are the right formula to smoothly and quickly execute in this rapidly growing market. I look forward to working with Datallegro to build a company that is a market leader and world-class enterprise."
About Datallegro(TM)
Datallegro offers a data warehouse appliance that provides dramatic performance improvement to large-volume data warehouses, without replacing the existing infrastructure. Using Datallegro's patent-pending technology, companies can run faster and more complex queries on their data in order to increase their business intelligence. Based in Aliso Viejo, Calif., Datallegro delivers a fast, flexible and affordable solution that allows a company's data to grow at the pace of its business. For more information on Datallegro go to www.datallegro.com.
About Palomar Ventures
Palomar Ventures was launched in 1999 by veteran venture capitalists to focus on early-stage information technology companies that demonstrate the potential for exceptional growth and market leadership. The partners at Palomar have contributed their energy, strategic insight, network of corporate relationships and recruiting skills to assist in building nearly 50 public companies. Palomar Ventures is currently investing Palomar II, a $220 million fund. Selected investments include Continuous Computing, Composite Software, Dorado, Efficient Networks, Gluecode, Inovys, KnowNow, Network Inference, Syntricity, Virtela, and Voxify.
About Venrock Associates
Venrock Associates was founded as the venture capital arm of the Rockefeller Family and continues a six-decade tradition of funding outstanding entrepreneurs and establishing successful, enduring companies. Venrock was formed in 1969 to build upon the successful investing activities of the Rockefeller Family that began in the late 1930s, when Laurance Rockefeller pioneered early-stage venture financing. Today, having invested more than $1.3 billion into 340 companies over the past 34 years, Venrock is one of the most established venture firms in the United States, with investment returns that place it among a small number of premier organizations that have achieved consistently superior performance. Venrock's investments include Apple Computer, Check Point Software, DoubleClick, Intel, 3Com, Caliper Technologies, Centocor, Illumina and Millennium Pharmaceuticals.
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Datallegro lands $6M first round
by Clifford Carlsen
TheDeal.com
Posted 03:46 EST, 9, Aug 2004
Data storage appliance maker Datallegro Inc. has raised a $6 million first round of funding co-led by Palomar Ventures and Venrock Associates to complete development of a product that combines low-cost storage technology with proprietary software to serve the fast-growing data warehousing market.
Irvine, Calif.'s Palomar and Menlo Park, Calif.-based Venrock funded the company after the startup's founders spent less than $100,000 and a little more than a year building the startup's first product, which assembles commodity disk storage and clustered computing power on up-to-date architecture to help companies boost their business analytics capabilities.
The company's product is currently in early customer testing. The new capital is expected to carry Datallegro through commercial introduction in early 2005 and a second round of funding less than a year later.
"By mid-next year we expect to have a couple of customers under our belt before going out to raise a second round," said Datallegro founder and CEO Stuart Frost. He would not disclose a valuation for the round but said a number of firms were competing for the deal before Datallegro negotiated a price directly with investors.
"We talked to 10 or a dozen firms and had several pending term sheets, but Palomar was very competitive," Frost said. "We got the best local firm in Palomar and a great Bay Area firm in Venrock."
Datallegro did not formally enlist an adviser in the deal but received introductions to investors from Jeff Moore and Mike Tanner of San Mateo, Calif.-based Chasm Group LLC. Greg Williams of Allen Matkins Leck Gamble & Mallory LLP in Irvine, Calif., represented Datallegro in the deal. The investors called on Jim Baer of Strategic Law Partners LLP in Los Angeles.
Brian Ascher, a senior principal with Venrock, said the firm came to the deal through Chasm on a recommendation from Paul Rivers Latham, a former 3i Group plc general partner retired from venture capital who had backed a previous venture-funded company taken public by Frost in 1996.
"We were attracted by a combination of things, including management and technology that appears to be a true breakthrough in terms of price/performance," Ascher said. "There's a $30 billion a year market for data warehousing, but most of the architecture is quite dated and doesn't take advantage of open-source software, clustering and off-the-shelf disk products that have brought the cost of storage down."
Frost said that his previous company sold software tools for database modeling. Before he left the company, he identified a large market for greater database modeling to serve the rash of business process applications that have been adopted in the past five years. With every new Internet-based analytic application or transaction automation system, companies require greater storage capacity as well as architecture to access it. Frost said Datallegro's product accomplishes both at low cost.
The company's product will sell for less than $500,000 and is positioned for customers using existing data warehouse systems such as those sold by Redwood Shores, Calif.-based Oracle Corp. But Frost claimed that Datallegro's product does not require capabilities of the largest data warehousing systems designed by vendors such as the Teradata division of Dayton, Ohio-based NCR Corp. Frost said Datallegro's product is capable of providing efficiencies in operation accomplished by upgrades to existing software while simultaneously adding low-cost storage capacity in its hardware.
Randy Lunn, a general partner with Palomar, said the firm invests most of its capital in southern California and was attracted to the investment based on management experience and its own experience investing in data architecture plays directed at the explosion in business process automation and analytics. Palomar is an investor in San Diego-based virtual storage software maker StoneFly Networks Inc., as well as business services database developer Composite Software Inc. of San Mateo, among others. |
