Reconnex Connects With $5.8M

Security startup Reconnex this week raised $5.8 million in Series B funding. The company plans to double its size in 2005.

The deal, led by existing investors Norwest Venture Partners and Outlook Ventures, brings Reconnexs total funding to $11.3 million.

Security vendors are a dime a dozen at the moment, but the Reconnex story is somewhat different. Whereas most security firms are focused on technologies such as firewalls and gateways that protect enterprise systems from external threats, Reconnex targets internal security breaches.

Reconnex’s core technology is the inSight platform, which consists of the iGuard security appliance and the iController, a content registration server. The iGuard monitors information flowing over a corporate network and checks it against a list of sensitive internal data held on the iController. This enables a company to identify whether anyone is attempting to leak critical data.

Apparently, that scenario is all too common. The challenge of securing internal networks was a major talking point at this publication's Next-Generation Data Center Forum event last week in New York. Many firms struggle to deal with security breaches caused, either deliberately or accidentally, by their own employees.Reconnex founder and CEO Don Massaro told NDCF attendees the iGuard platform can search approximately 150 different objects, including Excel spreadsheets, Word documents, instant messages, Powerpoint presentations, and CAD drawings. The system then checks for specific information held on the iController, such as customer lists, source codes, and even social security numbers.

Mountain View, Calif.-based Reconnex isn't the only startup playing in this space. Other vendors include content security specialists Vericept Corp., Tablus Inc., and Vontu.

Although Reconnex’s funding is somewhat dwarfed by the $16.3 million Series C unveiled by Vericept earlier this year, Massaro is not too concerned about planning for another round. “Hopefully we don’t have to do that,” he says, “We are hoping to be profitable by mid next year.”

Initially, Reconnex will use the funding to double its payroll of 55 employees. Massaro confirmed that much of this growth will be in the company’s sales and support business, although some product development people will also be recruited.

The company, founded last year, began shipping its first products in May and has so far racked up 50 customers. However, Vericept, which was launched in 1999, has something of a head start on Reconnex, having built up a 600-strong customer base.Massaro should know a thing or two about the startup scene. The exec, who describes himself as a "serial entrepreneur," co-founded his first company, disk-drive pioneer Shugart Associates, in 1973. He then sold the firm to Xerox Corp. (NYSE: XRX) in 1978.

Reconnex’s CTO Ratinder Ahuja has also got a strong startup track record. In March 2001, Extreme Networks Inc. (Nasdaq: EXTR) acquired Webstacks Inc., which he founded and managed as president and CEO.

In 1995 Internet Junction, another of Ahuja's companies, was snapped up by Cisco Systems Inc. (Nasdaq: CSCO). Ahuja then became a development manager at Cisco, in charge of various products in the enterprise switching and Internet appliances space.

The Reconnex CTO is also something of a dab hand at martial arts. “If you want to come down, he will break a bunch of bricks for you,” says Massaro.

— James Rogers, Site Editor, Next-Gen Data Center Forum0