Israeli startup Xeround announced a fourth round of $16 million led by US funds Trilogy Funds (who also just invested in Zon Networks) and Ignition Partners. Giza and Benchmark, the two Israeli funds that invested in Xeround early on, also joined the round. To date, this round puts Xeround at $34 million in funding since the company was started in March of 2005. Xeround plans to use the proceeds to expand its sales operation in the US and Europe.
Xeround develops virtualization software for databases which enables easy handling of files and documents, regardless of their location in the file servers. Similar to Israeli startups Voltaire, Xeround develops Intelligent Data Grid, a virtualization solution that leverages Grid technology to virtually connect several physical machines. The result is dramatically lower the data management costs of large databases for large databases such as telecom companies, government organizations, etc.
The company was started by two Israeli serial entrepreneurs: Sharon Barkay who started Sheer Networks and sold it Cisco and Gilad Zlotkin, who founded ClassData which was also sold to Cisco. Barkay left Xeround in 2006 to found ContexTream, another virtualization startup, and Zlotkin remains in the company and serves as president and VP of Technology. Xeround is based in Yehud, Israel and has a head-count of 40.
Last week, VMWare’s stock tanked more than 20% after the surprise resignation of Diane Greene, founder and long-time CEO. While the reason for the sudden resignation is considered to be political differences with the board, experts predict that the market for virtual machine software will commoditize rapidly. It will be difficult for VMware to charge a premium price when others are offering “good enough” technology essentially for free.
Will Xeround seize the opportunity? The additional $16 million and the demise of VM Ware will definitely put them one step closer.