Expand's Series E Nets $9M

WAN optimization startup Expand Networks Inc. today clinched $9 million in new investment, bringing the companys total funding to $50 million.

The Series E round was led by Tamir Fishman Ventures and included input from Discount Investment Corp. and The Challenge Fund. Some $6.7 million of the funding has already been committed, and the remaining $2.3 million will be finalized over the next 90 days.

Expand recently became the latest WAN optimization vendor to enter the burgeoning market for wide-area file services (WAFS) (see Expand Intros WAFS, CIFS Acceleration). Whereas WAN optimization uses various techniques to compress and streamline data to reduce its footprint on the WAN, WAFS gives users in remote offices access to information from data center servers by storing replicated files on caches at the remote sites. The technology aims to improve file transfer times and enable remote users to continue working on files even if the network goes down.

Vendors like Expand, Swan Labs Corp., and Riverbed Technology Inc. are looking to combine WAN optimization and WAFS technologies in an attempt to grab market share from the likes of Cisco Systems Inc. (Nasdaq: CSCO), which has also introduced WAFS products (see Swan Revamps WAN/WAFS Kit and Riverbed Fords WAN/WAFS Divide).

Despite many announcements, though, it seems the WAFS/WAN optimization space is something of an arms race, with no vendor currently calling all the shots (see Expand Wakes Up to WAFS).Expand sees the lull as its opportunity. Amir Chitayat, Expand’s president, confirmed that new hardware is planned for the coming months. “Late in the year we will be introducing some additional appliances that will make WAFS easy to deploy in very large data centers,” he says. Although unwilling to divulge specifics, the exec confirmed that these will likely use a blade form-factor.

The company is also looking to offer new professional services later this year, which will cover both its WAFS and WAN optimization offerings, according to Chitayat.

Some of the new funding will go toward expanding the company’s global presence, particularly in Asia. “We had not put that much effort into the Asian market to date,” Chitayat says. However, the startup recently opened an office in Singapore and will launch another in India later this year. Expand will open a Chinese base next year.

The president says the Series E round will also support the company’s partner strategies. Expand has four OEM partners: Lakeview Technology Inc., EMS Technologies Inc., LTI DataComm, and NTT Communications Corp. Chitayat says discussions are already under way with a “handful” of other partners, though he would not divulge their identities.

Earlier this year there was some speculation that Expand might be in line to get snapped up by a larger vendor, following a flurry of M&A activity around WAN optimization (see Juniper Takes Two: Peribit & Redline and Cisco Prowling WAN Optimization?).But Chitayat says that, with its Series E money burning a hole in its pocket, Expand is quite content to go its own way. “We’re very much on a path of continuing to grow independently."

Expand has 115 employees split between its R&D center just outside of Tel Aviv, its U.S. headquarters in Roseland, N.J., and a European base near London. Chitayat predicts that this figure will grow to around 130 people by the end of the year, with most of the new hires working in sales and marketing.

The company was founded back in 1998 by Talmon Marco, an Israeli engineer and entrepreneur. Marco, Expand’s former president, still serves as an advisor to the firm, although he is no longer on the company’s management team.

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