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.
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