Vyatta Lands $10M To Help Defend Against An Expanding Cisco

VentureWire

6/9/2009

By Scott Denne

As many tech companies look to defend their turf against Cisco Systems Inc.'s recent encroachment into the server business, Vyatta Inc., a maker of software-only routers, has raised $10 million in Series C financing to capitalize on more interest from potential partners.

New investor Citrix Systems Inc. led the round, with participation from existing investors Comcast Interactive Capital, Panorama Capital and ArrowPath Venture Partners. The valuation was not disclosed.

Since Cisco launched its Unified Computing System in March, many companies that now find themselves competing with the networking giant have reached out to Vyatta - whose software can turn any server into a router - for potential partnerships, said Kelly Herrell, Vyatta's chief executive.

"Cisco decided to pick a fight with everyone," Herrell said. "Previously, there was a line in the sand that vendors didn't cross."

Growing its partnerships will be a major use of the proceeds, but defensive ones will not be the only kind Vyatta pursues. It will also pursue partnerships, such as the one with Citrix that it is expected to announce Tuesday, with companies that have adjacent products, such as virtualization products, Herrell said.

Vyatta's software is available through a free, open-source download. The company brings in revenue by selling annual per-unit support fees to its customers, who range across industries, geographies and sizes, Herrell said.

The Belmont, Calif.-based company has now raised $28.5 million in venture capital.

As a result of the round, Gordon Payne, senior vice president and general manager of the delivery systems division at Citrix, has joined Vyatta's board of directors.