Topio Tops Off

Data replication startup Topio Inc. has raised $10 million in a second round of venture financing from Sigma Partners and Sequoia Capital. The round brings Topio's total funding to $13 million (see Topio Pulls in $10M).

The Santa Clara, Calif., startup will use the funds to expand its sales, marketing, and product development activities. Pete Solvik, managing director of Sigma Partners and the former CIO of Cisco Systems Inc. (Nasdaq: CSCO), has joined Topio's board of directors. Solvik left Cisco six months ago to join the VC firm.

With only 26 employees, this latest funding should see Topio safely home and dry. However, it's interesting the company managed to persuade investors to stump up this round without having a single customer reference yet. Eric Herzog, Topio's VP of marketing, says the company is in active engagements with several prospective customers and also notes that it has signed a reseller deal with the Benelux subsidiary of Colt Telecom Group plc (Nasdaq: COLT; London: CTM.L).

Topio claims its SANSafe software is a "novel" approach to asynchronous, long-distance data replication as it maintains a high level of data integrity while exploiting standard IP networking. "The result is a significantly cheaper disaster recovery offering than Fibre Channel over leased lines or dark fiber," says Herzog (see Topio Tips Its Hand).

In addition, the software overcomes data-consistency issues by time-stamping data as it is being sent, then reassembling it in the proper order on the other side, Herzog says. Industry analysts say this "consistency engine," combined with IP connectivity, could allow users to move forward with disaster-recovery implementations that have gotten bogged down by complexity and cost issues.Herzog maintains users should not be concerned about the CPU utilization of Topio's TCP/IP-dependent software. Typically, organizations try to avoid loading up their servers with network-processing functions, which can degrade the performance of other applications. Topio says its copy-on-write feature, which usually requires two steps in other applications, happens simultaneously in its product. "CPU utilization is less than 3 percent, so the performance impact is minimized," adds Herzog.

SANSafe is available for Windows 2000 and Solaris environments and will support AIX, HP-UX, and Linux later this year. Topio is also working on a switch-based version of its software with Rhapsody Networks, which was acquired by Brocade Communications Systems Inc. (Nasdaq: BRCD). The software is slated to ship this year, but the exact dates of coming releases have not been set.

Sequoia Capital has moved the startup, which was founded in January 2001, out of the incubator space at its Menlo Park, Calif., offices to Topio's own headquarters in Santa Clara. "We were in Yahoo Inc.