North Bridge VC: Other VCs Are Suddenly Throwing Millions At My Enterprise Startups

Jamie GoldsteinJamie Goldstein, VC at North Bridge Partners

Photo: North Bridge

Startups working in “very un-hot” areas have become super sexy targets for VC funding, North Bridge partner Jamie Goldstein told Business Insider.VCs are “calling my companies and asking, ‘What can you do with $50 million?’ The phone is ringing off the hook,” he says.

Goldstein specialises in seed/early stage funding of IT infrastructure startups, particularly networking and storage. He funded AppIQ, a network management company bought by HP in 2005 and Cognio, a wireless networking company bought by Cisco in 2007.

“You wouldn’t have seen that two years ago. The whole world was gaga for social media. But with Facebook/Groupon/Zynga showing weakness, they are seeing that social media is not infallible,” he says.

For instance, he’s funded Plexxi, a startup working on an enterprise networking product. It makes corporate networks run faster and cost less. (In wonky terms: it’s a DWDM data centre switch). It’s a great fit for software-defined networks, Goldstein says.

Plexxi launched in 2010 and raised over $8 million at the time. It wasn’t looking for more when Lightspeed and Matrix called. That lead to two more $20 million rounds, including one in that closed in June. So Plexxi has raised $48.4 million in two years, and the product hasn’t even shipped yet.

Even Goldstein, who has been a VC since 1998, is surprised. That just “wouldn’t have happened” a couple of years ago, he says.

Don’t miss: The Next 25 Big Enterprise Startups

NOW WATCH: Tech Insider videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.