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Rendition Networks attracts venture funding

By Tricia Duryee
Seattle Times business reporter

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"We are understaffed and really busy," said Raghav Kher, the Redmond company's chief executive.

With the sales team booked until October and 50 companies testing Rendition's software, the company thinks it will quickly add to its list of three dozen customers, which already includes some marquee names like Countrywide Financial.

To help fund the growth, Rendition plans to announce this week that it has raised $6 million in venture capital.

Ignition Partners led the company's third round with existing investors, Madrona Venture Group, Menlo Ventures and Northwest Venture Associates participating. To date, it has raised $41 million.

Rendition Networks is getting most of its attention from customers needing to comply with new corporate-governance regulations, including the Sarbanes-Oxley Act.

The act, implemented in mid-2000, established a slew of new laws applying to accountants, lawyers, stock analysts, company directors and even corporate networks.

Rendition's product, TrueControl, allows its customers to monitor what is going with their network and record the data for auditing purposes. It tracks all changes to the network and identifies all devices connecting to it, including routers, switches and firewalls.

It also allows the company to set distinct policies. All of that information is required to be tracked and stored under regulations such as Sarbanes-Oxley for security reasons, Kher said.

The software has other purposes, as well. If the network goes down, the software allows the system to see the last configuration, reducing downtime.

Rendition's product started gaining interest this year. Previously, Kher said the sales staff was far from booked and waited for the phone to ring.
 
Impending deadlines for regulatory compliance have helped. Also, Kher said, Rendition's niche market, called network configuration control, has become more established.

One sign of that is that there's competition. Three other companies are vying for business in the same market: Intelliden of Colorado Springs, Colo.; Voyence of Richardson, Texas; and AlterPoint of Austin, Texas.

"I like companies that have competitors. There's more people helping to shape the marketplace," said Ignition Partners' General Partner Cameron Myhrvold, who will join the company's board. "When they have no competitors, that can be scary; you have to wonder if there's really a market there."

The quick ramp-up in demand for Rendition's software recalls the buildup to the year 2000, when companies raced to upgrade their computers to avert what was widely thought to be a possible computer meltdown.

Last year, one-third of Rendition's customers bought its software for compliance reasons, Kher said. This year that figure is up to 58 percent.

Rendition plans to expand its sales and marketing. The company is not profitable, but Kher expects it to be in the second quarter of next year.

He worked previously at Microsoft under the direction of Myhrvold.

Tricia Duryee: 206-464-3283 or tduryee@seattletimes.com