Press Releases

Voyence raises $12M

Deal.com

November 03, 2004

Voyence Inc. raised $12 million in a third round of funding to boost marketing of network management software and to take advantage of a strong venture market to recoup some of the value lost in its second round of August 2002.

Richardson, Texas-based Voyence turned to Canaan Partners of Menlo Park, Calif., to lead the late-stage round, and previous investors InterWest Partners, Sevin Rosen Funds, CenterPoint Ventures and HO2 Partners, all of Dallas; STARTech Early Ventures of Richardson, and BancBoston Capital of Palo Alto, Calif., all participated. The deal brings total financing to $42.2 million and will allow the company to boost international expansion and accelerate marketing and distribution of its products.

Voyence CEO Susan Nash said after launching the company's product for commercial release in March 2003, Voyence had planned on getting to profitability without raising additional capital.

But as interest has grown in the emerging market for products to manage and configure devices on IT networks, the company opted to do one final private round that will take it to profitability in mid-2005.

"It was an ugly year in 2002 when we raised our second round, and we ended up talking to 67 firms to get a round that was down from the first round," Nash said. "Earlier this year we started getting a lot of calls from those firms about investing, and at first we said we were going to get to profitability without any more money, but about three months ago we realized a lot of these calls were from very prestigious firms that could help us."

After opting to take on the additional money, Nash said Voyence closed the round in eight weeks compared to the six months it took to complete the company's $17.5 million second round, led by Sevin Rosen. Nash would not disclose a valuation for the current round, but said the company received four competing term sheets and got a deal that was up significantly, and went a long way toward returning value lost in the previous round.

Voyence, which used no outside financial adviser for the round, called on David Oden of law firm Haynes and Boone LLP in Dallas. Caine Moss of Wilson Sonsini Goodrich & Rosati PC in Palo Alto represented the investors.

In addition to the overall improvement in the venture market, Nash said Voyence benefited this time from greater understanding of the market for network management software. She said much of the marketing of the second round included educating venture capitalists of the emerging need for products that configure and manage devices on a network, but that this round drew inquiries from firms actively looking to invest in the market sector.

Skip Glass, a venture partner with Canaan Partners, said Voyence has been one of the first companies to develop products to meet demands that are surfacing.

"I'm not a traditional venture capitalist in that I have mostly been in operations, and I try to identify spaces early that are going to become big markets," said Glass, who before joining Canaan in 2003 had been CEO of early applications traffic management software company uRoam Inc. before selling it to Seattle-based F5 Networks Inc. "Voyence's space is one that is really taking off, and it appears that none of the bigger players are addressing it, while Voyence already has significant deals with enterprise customers and service providers."

Voyence was founded in July 2000 as Power Up Networks, with $300,000 in seed money from STARTech. The company initially focused on developing software for deploying routers, and raised $12.4 million in a first round from HO2, Centerpoint InterWest and BancBoston in October 2000.

But Nash said that when she joined the company in January 2001 she talked with potential customers and then sat down with chief technology officer David Schrodel to develop plans for a more ambitious product.

"We did a thorough examination of where we needed to take the product to build a company on that could eventually do an IPO as an independent company," Nash said.

"What we came up with was not just a deployment tool but a commercial application."

Voyence's product was initially envisioned as running on an appliance, and Nash said the company accommodates customers who want a plug-and-play deployment, but she said the product was designed purely as software to allow customers to integrate it fully into the most sophisticated networks. The product is designed to improve network efficiency and prevent outages, but Nash said it also will help customers with compliance issues demanded of IT networks under new federal Sarbanes-Oxley and HIPAA (Health Insurance Portability and Accountability Act) regulations.

Copyright 2004 Knowledge Mosaic LLC. All rights reserved. No reproduction or redistribution without the permission of Knowledge Mosaic LLC.

For More Information

EMC management offerings deliver cross-domain solutions—for networks, storage environments, and data centers—that leverage the power of automation to manage today’s complex IT environments and ensure IT service delivery. These solutions provide end-to-end visibility into the IT services on which your organization relies, as well as the information infrastructure over which these services are delivered.

Get in control with the industry’s only automated network compliance, configuration, and change management solution. To learn more about how EMC and VoyenceControl can help you address business-critical compliance, best practices, and performance initiatives, contact your local EMC or EMC Smarts® sales representative, or call toll free in North America: 1-866-464-7381 or 1-508-435-1000; In Europe, call +44 (0) 20 8758 6750.