Yottaa, Going the Last Mile in Mobile, Lands $16M More in VC

7/10/13Follow @gthuang

Yottaa is a new variation on an old Boston theme.

It’s a Web infrastructure startup working on a tough technical problem. It’s trying to outmaneuver competitors in a new era of cloud and mobile devices. It has eschewed the popular “lean startup” methodology by building a larger, globally distributed team designed to go big from day one.

And now it’s following a classic venture-backed trajectory, with a $16 million Series C financing round led by new investor Intel Capital. Previous investors including General Catalyst Partners and Stata Venture Partners also participated in the round, which brings Yottaa’s total raised to about $30 million since its founding in 2009.

“We’ve grown up a lot as a company,” says Coach Wei, Yottaa’s founder and CEO.

In recent years, we’ve followed the Boston company (formerly based in Cambridge, MA) and hit on various themes: its “anti-lean” startup approach, its hiring in both Boston and Beijing, and its technical moves in Web optimization and application performance management that pit it increasingly against bigger companies like Akamai, Compuware, and Hewlett-Packard.

Yet I can’t shake the feeling that Yottaa is the new Akamai. If that’s true, the startup is in for one hell of a ride.

Yottaa started out by developing software to help websites run faster when users try to load them. It has since expanded into new kinds of content delivery networks and software to help businesses manage their Web and mobile performance more efficiently. All along, it has been building up Internet infrastructure that includes 30 data centers around the world (with more coming this year, Wei says).

The company’s technology aims to help businesses of all sizes deal with the rapid proliferation of different Web browsers and mobile devices, plus the increasing complexity of their own Web pages. According to Wei, Yottaa has made a transition from having a lot of free users and mid-size customers (like small e-commerce sites) to now having “a lot of big enterprise customers,” including PCMall, Bayer, BNY Mellon, Liberty Mutual, H&R Block, and the U.K. government.

In turn, Yottaa’s revenue for this year will be 10 times what it was last year, Wei says. And the company has been building its sales and marketing team to complement its engineering team; its total staff has grown to about 70, split roughly evenly between Boston and Beijing.

All of that combined with a renewed emphasis on mobile was enough to make Intel Capital lead a “preemptive” funding round, Wei says. “Our plan was to raise later.”

“We have an opportunity to become the leader, to champion this new category of dealing with mobile performance,” he says.

Now, about that Akamai comparison. As Wei sees it, Akamai made its name with content delivery networks, but that technology “solved the problem of the Web yesterday.” The main problems now, he says, are things like Web page sizes and numbers of requests, which interact with the complications of different kinds of devices, browsers, networks, and connections (DSL vs. cable, say).

To deal with these problems, Yottaa’s software effectively rewrites content, reduces requests, and generally tries to speed up the whole process of loading a page or running an application, no matter who’s doing it. The company has had two patents granted for its technology, with seven more pending. “We are about optimization,” Wei says. “It’s not about moving the bits. It’s about changing the bits, manipulating the bits.”

It’s still too soon to know whether Yottaa will be able to outmaneuver the giants and other startups in the field. But the lines have clearly been drawn in the battle for monitoring and improving Web and mobile performance—what Wei calls a $20 billion market opportunity.

“The bottleneck shifts from Internet backbone to the last mile,” he says. “The reality of the Web has changed.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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