Viola Private Equity, an Israeli PE fund with $164 million under management for technology buyouts, has announced a $7 million investment in Zend, the leading provider of open-source and commercial solutions based on PHP web applications. Zend was originally set up by founders Andi Gutmans and Zeev Suraski who were key contributors to PHP and the creators of the core PHP scripting engine, the Zend Engine. As a result of this round, Harel Beit-On, Founder and General Partner at Viola Private Equity will be joining Zend’s board of directors.
Zend has shown significant traction, having reached record revenue growth in 2010, while servicing large enterprise clients such as NYSE Euronext, GE and Cisco. As the popularity of PHP application grows on the web (with sites like Facebook and WordPress running on PHP), so grew Zend’s revenues from its web application server product line, which enables companies to run their applications on the cloud.
Zend has raised $37 million to date, most recently adding $9 million to its coffers in a round led by previous investors including: Greylock Partners, Index Ventures, Azure Capital Partners, Intel Capital,SAP Ventures. Zend was started in 1999 and is currently headquartered in Cupertino, CA with an R&D office in Israel. According to Linkedin, Zend has a headcount of 130.
In the press release posted on the company’s website, CEO Andy Gutmans said:
“As cloud initiatives move to the forefront of enterprise IT, Zend is well-positioned to help its customers realize the benefits of cloud computing while leveraging the power and ubiquity of PHP. Having Viola Private Equity as an investment partner with expertise to share in the management of large software companies will help Zend drive PHP innovation and community-building, and accelerate enterprise business growth.”
Founded in 2000 by the late Aharon Dovrat, Shlomo Dovrat, Harel Beit-On and Avi Zeevi, Viola represents a new breed of Israeli investor. It forms part of the Viola Group, a cluster of diverse investment funds with a strong technology orientation, managing close to $2 billion. The group includes the following sub-funds:
- Carmel Ventures, a top tier VC technology fund;
- Plenus Lending Solutions, Israel’s leading equity based lending funds;
- Vintage, the first and leading Israel-based secondary fund and a fund of funds;
- and V Partners, an investment fund for high net worth individuals
Viola Private Equity recognized the increasing demand for both growth capital and buyout, which require strong equity commitment and help with leadership that will take companies out of a stale-mode and towards an exit. On its website, the fund states that was created to fill a void in the Israeli investment landscape, the need to help established companies get to an exit through later-stage liquidity. Previous Viola PE investments include Degania Silicone, kibbutz factory for silicon medical devices, in which Viola invested $27 million for a 40% equity stake, AdsMarket, an online marketing firm, in which Viola invested $17 million in 2010 for 21% of its shares as well as four other investments mostly done in 2009 (Orad, Mobile Access, AeroNautics and Amiad Filtration Systems). Watch this space.
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