deals, Venture Capital, IT

ExtraHop Hauls In $5.1M to Help Companies Manage Their Networks Efficiently

Gregory T. Huang 4/14/09

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their product last December. Rothstein says the company has about 20 people who contribute to day-to-day operations, counting full-time employees and contractors. The latest financing is “very significant because it gives us the necessary capital for sales, marketing, and product development,” he says. Indeed, ExtraHop is “aggressively hiring for five open positions” across sales, product development, and other areas, says Tang. The company has gotten “great customer traction, better than expected,” and is planning to roll out two more products this year.

As for its investors, Rothstein says of Madrona, “I’m a huge fan of having a local VC for the first round. Having them close, they can help with everything from sourcing talent to finding office space.” And while they are not local to the area, Andreessen, the co-founder of Netscape, Opsware, and Ning, and Horowitz, the former CEO of Opsware and senior vice president at Hewlett Packard, are no slouches themselves. Rothstein calls them “both extremely knowledgeable” and cites their “excellent domain knowledge in data centers and enterprise.”

But surely other companies have come up with solutions to the complex IT problems that increasingly come with distributed data centers, widespread adoption of virtual machines, and intelligent network devices? Yes, but ExtraHop’s advantage, according to Tang, is threefold: its software can be used by anyone in the company (not just the networking experts), it can keep up with the traffic speed on any network, and it’s simple and easy to deploy.

Rothstein adds that recent gains in processing power and storage capacity are what make ExtraHop’s approach possible at all. “Two or three years ago, it would have been infeasible,” he explains. “We really see ourselves as innovators.” So while the company competes with a hodgepodge of traditional network-management technologies (that’s where packet sniffers come into play), most big companies like Cisco and F5 don’t really compete in the same space. However, Westford, MA-based NetScout (NASDAQ: NTCT) and a few other network-performance management companies around the country do—and it will be interesting to see whether ExtraHop’s technology and market strategy give it that extra spring to stay ahead of the curve.

Gregory T. Huang is the Editor of Xconomy Seattle. You can e-mail him at gthuang@xconomy.com or call 206-624-2249.