Red Herring chose eight of the 100 winners to profile in longer form:

·          Straddling the Future: Adimos bets on the intersection of two growing markets: digital video and wireless networks.

·          The DNA Dilemma: DNA Genotek finds a niche in collecting lots of DNA without puncturing the skin.

·          Flight Path: When handsets go bad, InnoPath helps carriers send a fix through the air.

·          Nano Now: Many say that nano profits are a decade away. Nano-Tex proves that they’re wrong.

·          Hooked on Phonetics: Nexidia says its software will let you listen to a year’s worth of audio recordings in one day.

·          So Much to Say: Eight million people worldwide use Six Apart software to express themselves.

·          Phone Numbers: Making a profit during an industry-wide recession gives Tellme Networks big dreams.

·          Democratizing Encryption: Voltage Security hopes to take the pain out of email privacy.

The other 92 are featured below.

AccessLine Communications

ADDRESS 11201 SE 8th St., Suite 200Bellevue,WA98004

11201 SE 8th St., Suite 200Bellevue,WA98004

PHONE 1-206-621-3500

FOUNDED 1998

CEO Doug Johnson

EMPLOYEES 107

FUNDING $100 million, 4 rounds

KEY INVESTORS Mellon Ventures, Venrock Associates,Gabriel Venture Partners,Alexander Hutton Venture Partners,Goldman Sachs Capital Partners

AccessLine Communications is a VoIP provider that offers its customers either hosted service or traditional service, where the bulk of the technology resides with the customer. Because VoIP operates on the same platform as the customers’ data transport systems, AccessLine can offer interesting applications that take advantage of the integration of voice and data on the same platform. In fact, the company develops software that integrates preexisting voice and data applications with new services, a feat that normally involves fairly complex systems integration. The company currently serves a business user base of approximately 100,000, including a number of large companies. The VoIP market is still emerging, and it’s getting pretty crowded, but AccessLine’s flexible business model and development services make it a force to be reckoned with.

Acme Packet

ADDRESS 75 Third Ave.Burlington, MA01803

75 Third Ave.Burlington, MA01803

PHONE 1-781-328-4400

FOUNDED 2000

CEOAndy Ory

EMPLOYEES 120

FUNDING $45.6 million, 3 rounds

KEY INVESTORSAdvanced Technology Ventures, Beachhead Capital, Canaan Partners, Menlo Ventures

Canaan

Acme Packet sells carrier-class VoIP session border controllers, or SBCs. These appliances sit at the edge of a network and facilitate IP voice traffic between networks, irrespective of protocol. Acme says that its SBCs also ensure quality of service between different operators—minimizing and reporting jitter, latency, and loss—while performing accounting functions and providing security against denial-of-service attacks. Acme SBCs can handle 32,000 simultaneous calls per unit, and capacity can be increased simply by adding units. Now deployed by eight of the world’s 10 top carriers, Acme’s SBCs were ranked first in market share globally by Infonetics Research in 2004, but the company faces a growing field of competitors—perhaps most notably from Chinese vendors Huawei and ZTE, which are developing SBCs at a fraction of the cost of Acme’s, which run between $30,000 and $60,000.

a growing field of competitors—perhaps most notably from Chinese vendors Huawei and ZTE, which are developing SBCs at a fraction of the cost of Acme’s, which run between $30,000 and $60,000.

Adesso Systems

ADDRESS One Liberty Square, Seventh FloorBoston, MA02109

One Liberty Square

PHONE 1-617-224-0870

FOUNDED 2000

CEO Dennis Kelly

EMPLOYEES 50

FUNDING $15 million+, 3 rounds

KEY INVESTORS The Carlyle Group

Adesso Systems creates software that facilitates mobile computing for offsite workers. The company’s synchronization engine gives staff in the field the benefit of a full-time connection, even when their mobile devices are disconnected. Information on a device is refreshed when it is connected and communicates with a central database. This is especially useful to field techs and salespeople who need access to the latest data from systems like CRM, inventory, and scheduling. The company’s key challenge is market education because mobile computing still comes in several flavors. Moving enterprise data offsite is strategic to Adesso’s business, but a lot of companies are still paper-based. As the number of mobile workers continues to rise, Adesso could leverage its technology to propel it into profitability.

AgION Technologies

ADDRESS 60 Audubon Rd.Wakefield, MA01880

60 Audubon Rd.Wakefield, MA01880

PHONE 1-781-224-7100

FOUNDED 1997

CEO J. Ladd Greeno

EMPLOYEES 27

FUNDING $36.5 million, 3 rounds

KEY INVESTORS Paladin Capital Group, Motorola Ventures

Acting as the Listerine for the world outside of your mouth, AgION Technologies kills germs that can cause sickness. The company makes engineered antimicrobials that continuously inhibit the growth of bacteria, mold, and fungus. The self-cleaning technology is used by more than 50 companies, which include DuPont, Honeywell, PaperMate, and Carrier. The market for this specialty technology is approximately $800 million, according to the company. Moreover, AgION says its Upgrade Solutions, a line of antimicrobial coatings and films that can be used on equipment, buildings, and other places, represents a $1.5-billion market opportunity. While the public appears to clamor for germ-killing products, some scientists have complained that the trend is overkill. Still, AgION products are geared to prevent things like hospital-acquired infections and food and water contamination.

Ahura

ADDRESS 46 Jonspin Rd.Wilmington, MA01887

46 Jonspin Rd.Wilmington, MA01887

PHONE 1-978-657-5555

FOUNDED 2002

CEO Dr. Daryoosh Vakshoori

EMPLOYEES 30

FUNDING $22 million, 2 rounds

KEY INVESTORS ARCH Venture Partners, Castille Ventures, ComVentures, Southern Ute Indian Tribe Growth Fund

Ahura is developing its handheld spectrometer, First Defender, to sniff out potential chemical and biological weapons. Different chemicals reflect and refract light in different ways; the way light reacts to a substance reveals whether it’s anthrax, talcum powder, or something else. The company brags that its devices are lighter, more rugged, and faster than those of its competitors, that they can “see” through glass and plastic and detect substances dissolved in water. Besides all this, the spectrometer is easy to use. But numerous companies are working on similar or competing technologies—including Lockheed Martin, Northrop Grumman, Cepheid, and Detection—and Ahura must convince customers that its gadget works outside of the lab.

AirDefense

ADDRESS 4800 North Point Pkwy., Suite 100Alpharetta, GA30022

4800 North Point Pkwy., Suite 100Alpharetta, GA30022

PHONE 1-770-663-8115

FOUNDED 2001

CEOAnil Khatod

EMPLOYEES 90

FUNDING N/A

KEY INVESTORS N/A

Analysts reckon that the market for girding wireless networks against attack will reach $200 million in 2005, and AirDefense claims it has 80 percent of that space. Startup bravado aside, the company is off to a good beginning. AirDefense recently launched a new product that defends corporate assets while an employee is linked to a remote Wi-Fi hot spot. Its core product can monitor Wi-Fi traffic from a central server, and if an intruder is detected, the system can either send a tactical air-strike or cut the digital flow at its source. Thanks to a partnership with Cisco, it can also blast rogue access points off the network from the switch level. Still, the company will have to leverage its partnerships to get market share.

Airgo Networks

ADDRESS 900 Arastradero Rd.Palo Alto, CA94304

900 Arastradero Rd.Palo Alto, CA94304

PHONE 1-650-475-1900

FOUNDED 2001

CEO Greg Raleigh

EMPLOYEES 150

FUNDING $132 million, 5 rounds

KEY INVESTORS Sevin Rosen Funds, Accel Partners, OVP Venture Funds, Oak Investment Partners, BlueRun Ventures, Meritech Capital Partners

There’s no doubt that we live in the wireless age, and Airgo Networks wants to make sure there’s no turning back. Its technology forms the basis for several products that increase wireless coverage and speed. No wonder, then, that within its first four years, Airgo has inked relationships with the likes of equipment makers Belkin, Netgear, and Linksys. The company generates revenue by selling chipsets and licensing software, and management expects to break even sometime this year. The CEO, CFO, and CTO boast a successful track record with Clarity Wireless, which they co-founded and eventually sold to Cisco in 1998 for $157 million. While the technology is compelling, it’s part of a fast-moving, cutthroat field, and it doesn’t take much time for new technology to turn stale.

AmberWave Systems

ADDRESS 13 Garabedian Dr.Salem, NH03079

13 Garabedian Dr.Salem, NH03079

PHONE 1-603-870-8700

1-603-870-8700

FOUNDED 1998

CEO Richard Faubert

EMPLOYEES 20

FUNDING $66 million, 4 rounds

KEY INVESTORS 3i, Adams Capital Management, ARCH Venture Partners, TeleSoft Partners, The Hillman Company

Adams

Boosting chip performance by cramming more and smaller transistors onto a single piece of silicon is getting harder to do. AmberWave Systems’ technology makes it possible to etch same-size transistors while improving speed and lowering power use. The technology is called “strained silicon,” meaning that silicon materials for making chips are stretched to make it easier for electrons to flow through the transistors. The company says its techniques can increase chip speed by 17 percent and reduce power intake by 34 percent. AmberWave licenses its know-how to wafer, chip, and semiconductor equipment companies. It also provides engineering services and conducts research for government and other organizations. AmberWave counts Applied Materials among its clients, but has a total of only six licensing customers.

AppIQ

ADDRESS 200 Wheeler Rd., South Tower, Burlington, MA01803

200 Wheeler Rd., South

PHONE 1-781-425-6260

FOUNDED 2001

CEO David Lemont

EMPLOYEES 105

FUNDING $30 million, 3 rounds

KEY INVESTORS Advanced Technology Ventures, Intel Capital, Matrix Partners, NorthBridge Venture Partners

Stricter regulations and increased record-keeping requirements have forced large- and medium-sized companies to augment their storage infrastructure. AppIQ’s software centralizes the control of various data storage systems so enterprises can monitor their storage environments. AppIQ brings together different storage systems on a common interface built on SMI-S, the storage industry standard. The company, which is currently planning an IPO in the next 18 months, serves clients such as Nielsen Media Research, The Weather Channel, and XM Satellite Radio. AppIQ has an edge on competitors thanks to its original equipment manufacturer (OEM) partnerships with storage companies like Hewlett-Packard, Sun Microsystems, and Hitachi. But it will take more than that to compete with heavyweights like EMC, the 800-pound gorilla of the storage industry, and Symantec, which just acquired storage vendor Veritas.

Hitachi

Applied Predictive Technologies

ADDRESS 901 N. Stuart St., Suite 1100Arlington, VA22203

901 N. Stuart St., Suite 1100Arlington, VA22203

PHONE 1-703-875-7700

FOUNDED 1999

CEO James Manzi

EMPLOYEES 40

FUNDING $6 million, 2 rounds

KEY INVESTORS Winston/Thayer Partners

Applied Predictive Technologies’ optimization tools determine profit impact for a variety of business decisions, helping to drive performance in large retail businesses. Typically, a company’s internal IT team develops these tools to make decisions, such as rolling out new products, opening a new location, or figuring out the benefits of advertising. But APT will create them so companies such as Starbucks and Sprint don’t have to. APT says its software is utilized by consumer goods manufacturers, and financial services companies, and that the main advantage of its product is the ability to predict the impact of future actions at a lower cost. However, the company may find it difficult to convince companies to hand over the reins, as most are used to creating these tools themselves.

are used to creating these tools themselves.

ArcSight

ADDRESS 5 Results WayCupertino, CA95014

5 Results WayCupertino, CA95014

PHONE 1-408-864-2600

FOUNDED 2000

CEO Robert Shaw

EMPLOYEES 100

FUNDING $28.5 million, 3 rounds

KEY INVESTORS SVIC, Kleiner Perkins Caufield & Byers, In-Q-Tel, Sumitomo

ArcSight provides data-collection and analysis software designed to make sense of the deluge of data from security products on corporate networks. The company is profitable and recorded 100 percent quarter-on-quarter revenue growth in 2004, according to CEO Robert Shaw. Two years ago, Gartner estimated revenue in this market segment at $100 million, but analyst Mark Nicolett says it has since grown rapidly. When ArcSight had 25 customers back in 2003, it logged $15 million in revenues; now it counts more than 100 customers. Mr. Shaw says the company is gearing up for an IPO later this year. Despite this market traction, ArcSight will have its hands full going head-to-head with NetForensics and GuardedNet.

Aristos Logic

ADDRESS 27051 Towne Centre Dr., Suite 290Foothill Ranch, CA92610

27051 Towne Centre Dr., Suite 290

PHONE 1-949-380-3400

949-380-3400

FOUNDED 2000

CEO Anil Gupta

EMPLOYEES 75

FUNDING $65 million, 4 rounds

KEY INVESTORS JP Morgan Partners, TPG Ventures, QTV Capital, Woodside Fund, Infineon Technologies

JP Morgan Partners, TPG Ventures, QTV Capital, Woodside Fund, Infineon Technologies

People are generating increasing amounts of digital data—from online banking information to confidential corporate records—and that means companies must find more room to store it. That’s good news for companies like Aristos Logic, which makes specialized processors and software for building storage systems. The company says its products allow storage system builders to reduce design time and lower cost. Aristos’ engineers can integrate major functions for a storage system into the same chip. The company counts LSI Logic as a manufacturing partner and has lined up key storage system manufacturers, including Xyratex. Aristos began full production of its first-generation processors within the past year. The company hasn’t made a profit yet, and it must work on expanding its customer list worldwide to take advantage of market opportunities.

Array Networks

ADDRESS 254 E. Hacienda Ave.Campbell, CA95008

254 E. Hacienda Ave.Campbell, CA95008

PHONE 1-408-378-6800

FOUNDED 2000

CEO Michael Zhao

EMPLOYEES 100

FUNDING $3 million, 1 round

KEY INVESTORS H&Q Asia Pacific, U.S. Venture Partners

Pacific, U.S.

Array Networks’ hardware and software improves the performance of network application infrastructure for large enterprises that need fast and secure application delivery. It has a limited—what it calls “unique”—­market, but a lucrative one. The company’s customers include four of the world’s 10 largest banks and six of the top 10 Japanese power companies, as well as Oracle, Vodafone, Bell Micro, AOL, CNN, Panasonic, Harris, Moody’s KMV, China Unicom, and Coach. The company is profitable and is on track to double revenue for the third consecutive year. It also captured the top market share position in China, Japan, and Korea. Array has lagged behind that performance in North America and Europe, however; the company hopes to grow market share in those regions over the next six months.

JapanEurope

Aruba Networks

ADDRESS 1322 Crossman Ave.Sunnyvale, CA94086

1322 Crossman Ave.Sunnyvale, CA94086

PHONE 1-408-227-4500

FOUNDED 2002

CEO Don LeBeau

EMPLOYEES 170

FUNDING $59 million, 3 rounds

KEY INVESTORS Sequoia Capital, Matrix Partners, Trinity Ventures, WK Technology

Over the past six months, Aruba Networks says its revenues and customer base have tripled, causing the wireless local area network (WLAN) switch maker to talk of an IPO as early as the end of this year. For the time being, though, the company is not yet profitable. Through continuous growth over the coming months, Aruba expects to break even later this year or early next year. The company has managed to secure a recent partnership with Alcatel and boasts big-name customers like Google, NBC, and the Las VegasMcCarranAirport. While Cisco’s recent acquisition of competitor Airespace means that Aruba missed the potential $450-million exit, the company says that taking its main competitor out of the industry is a godsend and validates its market.

ArubaAruba

Atrica

ADDRESS 3255-3 Scott Blvd.Santa Clara, CA95054

3255-3 Scott Blvd.Santa Clara, CA95054

PHONE 1-408-562-9400

FOUNDED 2000

CEO Vivek Ragavan

EMPLOYEES 150

FUNDING $134 million, 4 rounds

KEY INVESTORS Accel Partners, Benchmark Capital, Vesbridge Partners, JK&B Capital, France Telecom

France

With customers like Cox Communications, France Telecom, Deutsche Telekom, Japan’s KVH Telecom, and the French city of Pau, network equipment maker Atrica is establishing itself as a strong player in the telecom world. Atrica claims that its products lower carriers’ costs while allowing them to provide more voice, video, and data broadband services. It says its products save carriers more than 60 percent in operational costs compared with legacy infrastructure, and reduce capital expenses by a factor of 10. The company has respectable revenues, between $26 million and $50 million annually, but is not yet profitable. It expects to break even by the end of the year, however. Atrica also says it is pursuing a market leadership position in carrier ethernet equipment, which is commonly used in wide area networks (WANs).

Atrua Technologies

ADDRESS 1696 Dell Ave.Campbell, CA95008

1696 Dell Ave.Campbell, CA95008

PHONE 1-408-370-8000

FOUNDED 2000

CEO Anthony Gioeli

EMPLOYEES 40

FUNDING $29 million, 3 rounds

KEY INVESTORS Nokia Venture Partners, Ericsson Venture Partners, Acer Technology Ventures, NeoCarta Ventures, Intel Capital, mc3 ventures

Cameras, messaging, gaming, music, video, data services, and shopping have made handsets complicated and hard to use. Atrua Technologies wants to help people use all the functions on their phones with embedded touch controls that allow users to navigate the options with finger motions. The technology also provides security with fingerprint swiping instead of password typing. Atrua started shipping its first orders last year. Revenues are still less than $5 million, but the company expects to break even in 2006. Atrua’s potential market is huge: IDC estimates there are about 1.5 billion mobile phone users worldwide, and International Biometric Group estimates that the market for fingerprint scanners totaled about $464 million in 2003. But it’s still unclear how many functions users will eventually want to use on their phones, and if simplified cell phones become the norm, Atrua could find itself without a market.

BitPass

ADDRESS 4600 Bohannon Dr., Suite 100Menlo Park, CA94025

4600 Bohannon Dr., Suite 100Menlo Park, CA94025

PHONE 1-650-388-3000

FOUNDED 2002

CEO Matt Graves

EMPLOYEES 17

FUNDING $14.25 million, 2 rounds

KEY INVESTORS Worldview Technology Partners, Steamboat Ventures, First Data, RRE Ventures, Garage Technology Ventures, Cardinal Venture Capital, Amicus

E-commerce has problems handling impulse buys. Credit card fees hold back merchants from offering the virtual equivalent of gum at the cash register: unbundled content like an MP3 or an archived article. BitPass facilitates small purchases of digital goods—even those costing less than a credit card transaction—by managing customer accounts across multiple sites. The company, like competitors Peppercoin and PaymentOne, is betting that taking a small cut off each transaction will soon add up to big profits as the micropayment market grows to $11.5 billion by 2009, as predicted by TowerGroup. Investors are also hoping that BitPass can bounce back from management changeups and user-interface difficulties. But with an upcoming high-profile partnership announcement, “the prospects are looking better than at any point I’ve been with the company,” says board member Eric Dunn, a partner at Cardinal Venture Capital.

Bivio Networks

ADDRESS 4457 Willow Rd.Pleasanton, CA94588

4457 Willow Rd.Pleasanton, CA94588

PHONE 1-925-924-8600

FOUNDED 2000

CEO Dr. Elan Amir

EMPLOYEES 40

FUNDING $55 million, 4 rounds

KEY INVESTORS InterWest Partners, Storm Ventures, Venrock Associates, Goldman Sachs

Bivio Networks’ network appliance makes Linux applications work faster. Based on open industry standards, its architecture accelerates Linux network applications like firewalls and XML to run at speeds of 4 Gbps and higher. Customers don’t have to use proprietary software development tools—they can just drop a Linux application onto Bivio’s platform. The company also owns several patents related to its hardware architecture and middleware, and is even working on a 10-Gbps appliance. Bivio recently had its first seven-figure quarter, and is involved with standards bodies like Advanced Telecommunications Architecture (ATCA) and the Institute of Electrical and Electronics Engineers (IEEE). But at more than $25,000 a pop for its device, Bivio may have a hard time convincing IT departments that the extra speed is worth the cost.  

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Blackball

ADDRESS 10525 Vista Sorrento Pkwy., Suite 100San Diego, CA92121

10525 Vista Sorrento Pkwy., Suite 100San Diego, CA92121

PHONE 1-858-623-9400

FOUNDED 2002

CEO Bob Brown

EMPLOYEES 15

FUNDING $3.2 million, 3 rounds

KEY INVESTORS Founders Patricia and Bob Brown, chairman of the board Al Shugart, CTO Andrew Scherpbier

Blackball’s software manages unstructured data, making stored files easier to find in the future. CEO Bob Brown founded Blackball with his wife Patricia, and it’s financed by friends and family, but this is no mom-and-pop shop. Mr. Brown has spent more than 20 years in the storage industry, including serving at Seagate, where he drove the $3.1-billion acquisition of Seagate Software by Veritas. Blackball is in active technical evaluations with several major original equipment manufacturers, with a focus on Asia, where the company has already inked a deal with Toshiba. Mr. Brown’s tough task is to demonstrate that Blackball can best EMC and Symantec-Veritas in searching enterprise data, and Google and Microsoft in searching the desktop. Or—as is looking increasingly likely—to convince one of them to buy him out.

Asia

Blue Fang Games

ADDRESS 1601 Trapelo Rd.Waltham, MA02451

1601 Trapelo Rd.Waltham, MA02451

PHONE 1-781-547-5475

FOUNDED 1998

CEO Adam Levesque

EMPLOYEES 46

FUNDING N/A

KEY INVESTORS N/A

Among the many PC games released in the “tycoon” genre—which involves building and interacting with characters—Blue Fang Games’ best-selling title, Zoo Tycoon, has sold 5 million units. Its game play is centered on the care and development of animals in the zoo. Its latest version, Zoo Tycoon 2, adds a new “needs-based” artificial intelligence system for animals that provides more realistic and unpredictable animal behavior—Zoo Tycoon 2’s key differentiator. Microsoft Game Studios, the game publisher, manufactures, markets, and distributes the game across the globe. However, in the live simulation area, Electronic Arts’ The Sims is a tough competitor, and Blue Fang may want to reconsider depending too much on one title for revenues.

Zoo Tycoon 2The Sims

Calix

ADDRESS 1035 N. McDowell Blvd.Petaluma, CA94954

1035 N. McDowell Blvd.Petaluma, CA94954

PHONE 1-707-766-3000

FOUNDED 1999

CEO Carl Russo

EMPLOYEES 230

FUNDING $290 million

KEY INVESTORS Redpoint Ventures, Azure Capital, MSD Capital, TeleSoft Partners

Calix’ high-capacity network equipment allows telecom companies to deliver voice, data, and video service over fiber and copper. The company was founded by the network infrastructure whiz team of Carl Russo and Michael Hatfield, whose last project, Cerent, was sold to Cisco for $6.9 billion in 1999. Calix had 33 percent market share in 2004 with its C7 product, far ahead of runners-up Paradyne, Occam, and Zhone, according to Infonetics Research. But the market for new broadband technologies is just beginning to come into its own, with the phone companies finally venturing into fiber to the home. If Calix wants to maintain its dominance it needs to convince SBC, BellSouth, Verizon, or Qwest to pony up for high-capacity broadband and integrated interfaces. Calix also faces new competition from Huawei, which is staking out its territory in the lucrative Asian markets.

Chimerix

ADDRESS 11149 North Torrey Pines Rd., Suite 200La Jolla, CA92037

200La Jolla, CA92037

PHONE 1-858-200-0400

FOUNDED 2002

CEOGeorge Painter

EMPLOYEES 16

FUNDING $16.3 million, 3 rounds

KEY INVESTORS Sanderling Biomedical Venture Capital, Frazier Healthcare Ventures, Asset Management Company

Chimerix is focused on making medicine easier to take, and not with a spoonful of sugar. The company takes a drug and chemically modifies it so that the body treats the new compound as if it were a common type of fat involved in the metabolism process. This enables the gut to readily absorb the drug, and allows a controlled distribution to the various organs of the body. The company says its technology will also decrease the risk of adverse reactions to drugs. Chimerix has a $36.1-million grant from the National Institutes of Health to push through development of an oral antiviral drug for the prevention and treatment of smallpox infection. This could eventually bring big revenues, if the decision is made to restart widespread smallpox vaccinations. But for now, the company’s drugs are still a good distance from the market.

CipherTrust

ADDRESS 4800 North Point Pkwy., Suite 400Alpharetta, GA30022

4800 North Point Pkwy., Suite 400Alpharetta, GA30022

PHONE 1-678-969-9399

FOUNDED 2000

CEO Steve Raber

EMPLOYEES 186

FUNDING $49 million, 2 rounds

KEY INVESTORS Battery Ventures, Greylock Partners, Noro-Moseley, Silicon Valley Bank, U.S. Venture Partners

U.S.

With a customer list for its IronMail anti-spam appliance that includes 30 of the Fortune 100, there’s no doubt that CipherTrust has made a name for itself. The company’s network appliances sit in front of the mail server, blocking spam and tackling viruses before they get into corporate computer systems. According to market research firm Gartner, 80 percent of North American and European enterprises will purchase a spam filter by the second half of 2005. By 2008, sales of appliance-type solutions such as IronMail’s will dominate the market by 10 to one, edging out other spam solutions, including the use of software inside the network and outsourcing email to a third party. CipherTrust has capitalized on this growing market to become profitable, but the company’s future success will depend on its ability to go toe-to-toe with well-funded startup IronPort and security giant Symantec.

Cittio

ADDRESS 80 Tehama St.San Francisco, CA94105USA

80 Tehama St.San Francisco, CA94105USA

PHONE 1-877-424 8846

FOUNDED 2001

CEO Jamie Lerner

EMPLOYEES 15

FUNDING $3.5 million, 1 round

KEY INVESTORS Hummer Winblad Venture Partners

Cittio’s network-monitoring and operations software helps organizations monitor the overall health of their IT infrastructure, including computers, network equipment, and software. The company says its WatchTower product considerably reduces the time required to install and maintain a system-monitoring solution, compared to other behemoth competitors like Hewlett-Packard and IBM. The profitable company works on partnerships with resellers and system integrators, and its customers include Blue Cross Blue Shield, Capital Advantage, and Granite Construction. Cittio says it differentiates itself from large competitors by specializing in the network-monitoring area and offering greater efficiency and better pricing. But challenging Big Blue and HP is no easy feat, nor is matching up to smaller competitors in the $7-billion worldwide market for network-monitoring products.

ClearForest

ADDRESS 950 Winter St., Suite 1900Waltham, MA02451

1900

PHONE 1-781-250-4300

FOUNDED 1998

CEO Barak Pridor

EMPLOYEES 85

FUNDING $31.25 million, 3 rounds

KEY INVESTORS Greylock Partners; Pitango Venture Capital; Booz, Allen & Hamilton; Harbourvest; Walden; ABS Ventures

ClearForest is a business intelligence company, but it doesn’t just help customers analyze numbers. It also helps them analyze concepts and patterns tucked away in the text of emails, RSS feeds, and word documents, and then exports the data into an Excel spreadsheet. That might sound simple, but companies say it saves them a lot of money and time. With a customer list that includes heavyweights Dow Jones, Reuters, and Eastman Kodak, ClearForest isn’t short on referrals or backers with deep pockets. But it is one of the many names in the crowded field of business analytics. While the company may be a step ahead of its competition at this point with patents on its algorithms, its solution isn’t unique, and it may struggle to differentiate itself going forward.

Colubris Networks

ADDRESS 200 West St., Suite 3Waltham, MA02451

200 West St., Suite 3Waltham, MA02451

PHONE 1-781-684-0001

FOUNDED 2000

CEO Barry Fougere

EMPLOYEES 83

FUNDING $36 million, 3 rounds

KEY INVESTORS Doll Capital Management, Prism Venture Partners, Mid-Atlantic Venture Funds, GrandBanks Capital, Business Development Bank of Canada, Telecommunications Development Fund

Canada

Colubris Networks sells its wireless local area network (WLAN) equipment to more than 1,000 service providers and enterprises, including Swisscom, McDonald’s, and Connexion by Boeing. The technology includes access points and a central management system, which creates a network to carry services like voice, data, and video. In a competitive WLAN industry where companies battle to find niches to sell to big-name clients, Colubris says that its system is priced at less than half of its competitors, and can carry three times the number of access devices. Notably, though, major network builders have recently partnered with Colubris’ competitors: Aruba Networks with Alcatel, Nortel with Trapeze Networks, and Cisco with its recent acquisition Airespace. With all the large companies choosing Colubris’ contenders, the company could struggle to avoid being the last pick on the dance floor.

Composite Software

ADDRESS 2655 Campus Dr., Suite 200San Mateo, CA94403

2655 Campus Dr., Suite 200San Mateo, CA94403

PHONE 1-650-227-8200

FOUNDED 2002

CEO Jim Green

EMPLOYEES 60

FUNDING $17.35 million, 2 rounds

INVESTORS Palomar Ventures, Apax Partners, Lehman Brothers Venture Partners, Clearstone Venture Partners, Dot Edu Ventures

Composite Software’s tools integrate enterprise data so that it all seems to exist in one format and in one place, which gives executives the ability to pull up data regardless of where it’s stored, and enables access to reporting and analytics tools that they can use while making decisions. Thanks to caching technology, the data doesn’t move from its location and isn’t replicated, which helps eliminate confusion in managing data.As real-time data becomes more relevant to business intelligence, demand is likely to increase. Composite has a diversified client base that ranges from Hewlett-Packard to Pfizer to Starbucks. But it’s not the lone runner—a lot of companies are in the field, including MetaMatrix and Avaki. And many enterprises could pass on Composite’s tools by lumping them with the flood of data warehousing and analytics solutions already on the market.

comScore Networks

ADDRESS 11465 Sunset Hills Rd., Suite 200Reston, VA20190

11465 Sunset Hills Rd., Suite 200Reston, VA20190

PHONE 1-703-438-2000

FOUNDED 1999

CEO Magid Abraham

EMPLOYEES 300

FUNDING $88 million, 5 rounds

KEY INVESTORS Lehman Brothers Venture Partners, JP Morgan, Accel Partners, Adams Street Partners, Topspin Partners

Adams Street

Rather than depending on web users to self-report their activity, or cookies to count unique visitors, comScore Networks gets consumers’ permission to peek into their computers—recording their ad views, purchases (even the price paid), and promotions used. It’s a tad intrusive for some people’s taste, but 2.5 million consumers worldwide participate. The resulting data is a valuable commodity for any marketing campaign. Since its last funding round in 2003, comScore has subsisted on its sizeable profits. And its customer list is long, including AOL, Yahoo, Verizon, and Bank of America. So far, only one web analytics company has gone public—WebSideStory in September 2004—while the rest of the myriad competitors have been consolidating. comScore is certainly the leader, but to really utilize its power, it needs to broaden its focus outside of the United States.

Comverge

ADDRESS 120 Eagle Rock Rd., Suite 190East Hanover, NJ07936

120 Eagle Rock Rd., Suite 190East Hanover, NJ07936

PHONE 1-973-884-5970

FOUNDED 1997

CEO Robert Chiste

EMPLOYEES 97

FUNDING $35.4 million, 2 rounds

KEY INVESTORS DSSI, EnerTech Capital Partners, Nth Power, RockPort Capital Partners

The renewable energy sector depends on more than just energy-gathering technologies—energy management is also vital to the sector’s viability.Comverge uses wireless communications to provide energy intelligence, including load management, automatic meter reading, and “real-time” grid-management programs, to electric utilities. The company already has more than 500 energy supplier clients, including PPL, Ottertail Power, SouthernCalifornia Edison, PacifiCorp, Gulf Power, Louisville Gas & Electric, Austin Energy, and San Diego Gas & Electric. Comverge has two business models, including a “no-risk” model in which the company assumes all the risk of installing and managing the program in exchange for a percentage of the gains. The company’s revenues top $11 million per year, but it’s not profitable; Comverge expects to break even by the end of this year.

Cornice

ADDRESS 1951 S. Fordham St., Suite 105Longmont, CO80503

1951 S. Fordham St., Suite 105Longmont, CO80503

PHONE 1-303-651-7291

FOUNDED 2000

CEO Kevin Magenis is founder, president, and chairman

EMPLOYEES 165

FUNDING $81 million, 2 rounds

KEY INVESTORS BA Venture Partners, CIBC Capital Partners, GIC Special Investments, BlueRun Ventures, VantagePoint Partners

With the rise of MP3 players and mobile phones as must-have consumer devices, it’s obvious that the future is a mobile one. Yet a major problem holding mobility back is that pocket-sized devices can only hold so much data, and compact storage is expensive. Cornice wants to change that. The company’s “storage element” was the first storage to market in MP3 players, mobile phones, USB devices, and others. The storage element is a 2- or 3-GB component that holds any kind of data, at a cost below storage options from traditional hard disk drive (HDD) companies. Cornice’s customer list is a who’s-who of the consumer electronics world, including Philips, Samsung, and Sony. To hold onto these marquis clients, the company will have to keep its lead in the footrace for larger, cheaper storage, as personal storage arrives at the inevitable commoditization that hit enterprise storage hardware several years ago.

Crossbeam Systems

ADDRESS 200 Baker Ave.Concord, MA01742

200 Baker Ave.Concord, MA01742

PHONE 1-978-318-7500

FOUNDED 2000

CEO Peter George

EMPLOYEES 130

FUNDING $60 million, 4 rounds

KEY INVESTORS Tudor Ventures, Matrix Partners, NorthBridge Venture Partners, Commonwealth Capital Venture Partners, Intel Capital, Charles River Ventures

NorthCharles River

Think of Crossbeam Systems as the Total cereal of computer security. The company’s X-Series and C-Series products integrate the best security applications in their classes—firewalls, intrusion prevention/protection, web filtering, and more—together on one platform. Crossbeam says that one of itssecurity service switches replaces about 30 boxes. These single-box security devices are aimed toward medium and large enterprises and service providers—companies like BellSouth, Verizon, Earthlink, Vodafone, Swisscom, British Telecom, Tyco, BP, Unisys, and United Airlines. IDC recently ranked Crossbeam No. 1 in market share in the high-end (more than $50,000)unified threat management equipment market. Still, compared to Juniper and Cisco, which offer somewhat similar products or services, Crossbeam has yet to make its name a household one.

Crossbow Technology

ADDRESS 41 Daggett Dr.San Jose, CA95134

41 Daggett Dr.San Jose, CA95134

PHONE 1-408-965-3300

FOUNDED 1995

CEO Mike Horton

EMPLOYEES 100+

FUNDING $13 million, 3 rounds

KEY INVESTORS Intel Capital, Morgenthaler Ventures, The Cambria Group

With two consecutive years of profitability and more than $16 million in 2004 revenue, Crossbow Technology has a very strong financial position—and the company’s projections for 2005 are even better. Over 1,300 customers, including partner/investor Intel, have installed Crossbow’s smart dust motes—tiny wireless devices that monitor information such as air quality and barometric pressure. Crossbow’s open-source TinyOS software allows the motes to communicate in a network and send data to external applications that keep tabs on industrial machines, oil tanker engines, or warehouses. The company is growing, with new offices in China and Japan and a worldwide staff increase of 50 percent since January 1. Because wireless sensor network competitors like Dust Networks, Ember, and Millennial Net have painted a target on Crossbow’s back, the company must continually update its technology to stay ahead.

Japan

Cyota

ADDRESS 8 West 38th St., Suite 1101New York, NY10018

8 West 38th St., Suite 1101New York, NY10018

PHONE 1-212-977-5402

FOUNDED 1999

CEO Naftali Bennett

EMPLOYEES 100

FUNDING $27.5 million, 5 rounds

KEY INVESTORS Bessemer Venture Partners, RRE Ventures, GizaVenture Capital, Israel Seed Partners, Dresdner Kleinwort Benson Online Ventures, JAFCO Investment, Toshiba, Poalim Capital Markets Technologies

BessemerVenture Capital, Israel

Cyota CEO and co-founder Naftali Bennett once battled terrorists as a company commander in the Israeli Defense Forces’ anti-terror unit. Now, he battles online fraudsters. His company works with banks to prevent, detect, and control online fraud. Through web-hosted applications, Cyota profiles users and rates the risk of individual transactions based on a variety of data—including communication and behavioral data, device fingerprints, and IP location—tracked in real time. Cyota’s client list includes JP Morgan Chase, Bank of America, and Providian. It says it works with more than 35 large global banks and 9,000 small ones. Cyota makes its money through different kinds of fees that it charges its customers. Given how important Internet security has become to e-commerce companies, Cyota has no reason to worry about a shortage of potential customers. But as online fraud grows increasingly complicated, Cyota, along with all Internet security firms, needs to stay a step ahead of the crooks.

DataPower

ADDRESSOneAlewifeCenter, Fourth Floor Cambridge, MA02140

PHONE 1-617-864-0455

FOUNDED 1999

CEO Jim Ricotta

EMPLOYEES 50

FUNDING $25 million, 3 rounds

KEY INVESTORS Atlas Venture, Venrock Associates, Mobius Venture Capital, Seed Capital Partners

DataPower provides networking solutions that allow an organization’s applications to communicate with one another through messages. The company is targeting the market for XML—which facilitates the sharing of unstructured data and information on the Internet—a market that IDC estimates at $3.7 billion. It also targets the web services market, which is projected to reach $34 billion by 2007, according to IDC. DataPower’s solution combines many security functions that distinguish it from smaller competitors like Forum Systems and Cast Iron Systems. However, the stiffest competition could come from networking giant Cisco, which is developing its own application-oriented networks. DataPower sells its network equipment to end users and embeddable technology solutions to original equipment manufacturers; its customers include JP Morgan Chase Bank, Pfizer, and Wachovia.

DataSynapse

ADDRESS 632 Broadway, Fifth FloorNew York, NY10012

PHONE 1-212-842-8852

FOUNDED 2000

CEOPeter Lee

EMPLOYEES 75

FUNDING $31.25 million, 4 rounds

KEY INVESTORSGoldman Sachs, Bain Capital, Intel Capital, NeoCarta Ventures

In academia, a version of grid computing is used to hunt for alien life in outer space. In the enterprise, grid computing aims to harness the untapped power of corporate computers to perform large-scale number-crunching jobs like payroll. DataSynapse hopes to exploit the trend toward grid computing; IDC pegs the market at $12 billion by 2008. The startup claims it has developed a flexible software package that matches the supply of CPU muscle with the demands of the tasks at hand. The company boasts Bank of America, Credit Suisse First Boston, and Goldman Sachs as customers. Its roster of partners is also impressive: IBM, Hewlett-Packard, Intel, and Oracle. But to stay ahead on the grid, DataSynapse will have to stay aggressive and continue to grow its customer base.

Dust Networks

ADDRESS 30695 Huntwood Ave.Hayward, CA94544

30695 Huntwood Ave.Hayward, CA94544

PHONE 1-510-548-3878

FOUNDED 2003

CEO Joy Weiss

EMPLOYEES <50

FUNDING $29 million, 2 rounds

KEY INVESTORS Cargill Ventures, Crescendo Ventures, Foundation Capital, In-Q-Tel, Institutional Venture Partners

Though Dust Networks was a late entrant into the wireless sensor networking space, it has made up for lost time. The company’s iPod-sized sensors work together in a mesh network to monitor all kinds of systems. Co-founder and CTO Kris Pister, a UC Berkeley professor, has parlayed high-level security and defense connections into several government contracts, including traffic monitoring on the U.S.-Mexico border for the U.S. Department of Homeland Security and an energy-efficiency improvement project for the U.S. Department of Energy. Dust has a host of competitors—most notably Crossbow—but many are more focused on chips and software, while Dust aims to be a networking company. After initial funding from Foundation Capital, the company scored $22 million in a February Series B. This year, the company is working to expand its sales efforts and solidify commercial markets such as building automation and industrial monitoring.

eEye Digital Security

ADDRESS 1 ColumbiaAliso Viejo, CA 92656

Aliso Viejo, CA 92656

PHONE 1-866-339-3732

FOUNDED 1998

CEOs Firas Bushnaq and Marwan Naja

EMPLOYEES 140

FUNDING $32 million, 4 rounds

KEY INVESTORS Bessemer Venture Partners, Insight Venture Partners

Bessemer

eEye Digital Security has sold its security products to the U.S. Department of Defense, Citigroup, and some 5,000 other customers. It is well-poised to take a bite out of the $900-million market IDC estimates for vulnerability management in 2008. The company recently added host-based intrusion prevention—software designed to keep hackers off the computer—to its security software suite in an effort to leverage its existing customer base and tap into an even bigger market. The company has done a good job of expanding its product base, but faces stiff competition from Qualys in the vulnerability assessment market and Prevx in the intrusion-prevention market. One of eEye’s key assets is its vulnerability research division, headed up by wiz-kid Marc Maiffret. The research helps eEye’s products stay ahead of threats before software companies issue patches.

Electric Cloud

ADDRESS 2307 Leghorn St.Mountain View, CA94043

2307 Leghorn St.Mountain View, CA94043

PHONE 1-650-968-2950

FOUNDED 2002

CEO John Ousterhout

EMPLOYEES 20

FUNDING $13.1 million, 2 rounds

KEY INVESTORS Mayfield, U.S. Venture Partners, RRE Ventures

Mayfield, U.S.

Electric Cloud says its software development toolhelps software companies create their products quickly and improves engineering productivity by 10 to 15 percent.The company claims that its technology can reduce the time it takes to translate code from several hours to minutes. Electric Cloud says its method is also more cost-effective, using clusters of cheapservers instead of more expensive multiprocessor systems. If a team of 100 engineers spends one less hour waiting for code translation, itcan save a softwaremaker more than $1 million annually, according to the company. Its challenge will be convincing software developers to add one more product to their panoply of development tools. One good sign: partnerships with blue-chip companies like Sun Microsystems, Hewlett-Packard, and IBM.

Elemental Security

ADDRESS 155 Bovet Rd., Suite 100San Mateo, CA94402

155 Bovet Rd., Suite 100San Mateo, CA94402

PHONE 1-650-292-1400

FOUNDED 2002

CEO Peter Watkins

EMPLOYEES 35

FUNDING $10 million, 2 rounds

KEY INVESTORS Bessemer Venture Partners, Mayfield, Sequoia Capital

Bessemer

Network security and corporate policy have traditionally required fairly extensive knowledge of complex security setup and maintenance issues. But using its own custom language, Elemental Security has developed a policy-management product that allows companies to implement security and compliance policies without the need for much knowledge about the underlying technology. Its product can automatically recognize new devices on the network and apply company security and access policies accordingly. The company says its product offers a single window into the security of the enterprise, making it less of a management headache to set up and monitor. Elemental may meet resistance in some circles because its language is proprietary, but where security is concerned, effectiveness is usually the first consideration.

Ellacoya Networks

ADDRESS 7 Henry Clay Dr.Merrimack, NH03801

7 Henry Clay Dr.Merrimack, NH03801

PHONE 1-603-577-5544

FOUNDED 1999

CEO Gerald Wesel

EMPLOYEES 62

FUNDING $124 million, 5 rounds

KEY INVESTORS Lightspeed Venture Partners, Atlas Venture, Flagship Ventures

At peak times, broadband networks fill up with different applications, including gaming, video, voice, and more. Ellacoya Networks has developed a product that monitors those applications, as well as subscriber traffic patterns, allowing carriers to set up plans charging different rates for different applications, thus increasing revenues. The technology costs carriers $1 to $2 per subscriber, and brings a return on investment within a few months—sometimes a few days, says Ellacoya. The company also has bandwidth management technology that manages the network, prioritizing more time-dependent applications, such as voice and video. It also controls bandwidth abuse, reducing congestion and preventing the spread of malware. But carriers have many attractive network managers to choose from, including Atreus Systems, Broadjump, and Caspian Networks, and Ellacoya only expects to break even in November.

eMeta

ADDRESS 81 Franklin St., Suite 500New York, NY10013

81 Franklin St., Suite 500New York, NY10013

PHONE 1-212-925-3656

FOUNDED 1998

CEOJonathan Lewin

EMPLOYEES 50

FUNDING Privately funded

KEY INVESTORSN/A

As an ever-growing amount of media becomes available for sale on the web, middlemen have positioned themselves to broker the sale of everything from old newspaper articles to movies and software rented by the minute. eMeta claims it does more than just handle the transactions for digital goods and services—it controls access to databases, runs promotions, and manages subscriptions. Jonathan Lewin conceived the idea for eMeta back in the dot-com boom days while working in the publishing industry, and early eMeta customers like the New York Times have been a beachhead for the company. Now, eMeta is eyeing Asian markets. To outflank the competition it will have to continue to roll out new products that customers are willing to pay for.

New York Times

Emphasys Medical

ADDRESS 700 Chesapeake Dr.Redwood City, CA94063

700 Chesapeake Dr.Redwood City, CA94063

PHONE 1-650-364-0400

650-364-0400

FOUNDED 2000

CEO John McCutcheon

John McCutcheon

EMPLOYEES43

FUNDING $58 million, 4 rounds

KEY INVESTORS Advanced Technology Ventures, Split Rock Partners, Morgenthaler Ventures, OrbiMed Advisors, Morgan Stanley Venture Partners

Split

If you develop emphysema, the tissue in your lungs becomes less elastic. This means that air tends to get trapped in diseased parts of the organ, making patients constantly feel out of breath. Emphasys Medical has developed a device that is inserted into the lung: a one-way valve that adapts to the individual size and shape of a patient’s airway, taking the pressure off functional areas of the lung by helping the diseased regions to deflate. The company estimates the potential worldwide market for its device at $2 billion annually, and so far has seen the product approved in the European Union, Australia, and New Zealand. It is currently halfway through pivotal trials in the United States, which means a two- to three-year time-to-market advantage on competitors. But as a single-product company, much of Emphasys’ success depends on whether its device gets approval in the U.S. and catches traction in the market.

AustraliaUnited States

Emptoris

ADDRESS 200 Wheeler Rd.Burlington, MA01803

200 Wheeler Rd.Burlington, MA01803

PHONE 1-781-993-9212

FOUNDED 1999

CEO Avner Schneur

EMPLOYEES 250

FUNDING $54.5 million, 4 rounds

KEY INVESTORS ABS Capital Partners, Menlo Ventures, HarbourVest, NETinvest Holdings

Emptoris’ suite of web-based applications for buying goods and services has attracted an impressive group of big-name customers, including American Express, Bank of America, Bayer, GlaxoSmithKline, IBM, JP Morgan Chase, Motorola, and Vodafone. Emptoris targets large companies with its software, which identifies and evaluates suppliers. Last year, Emptoris increased its customer base by 73 percent, and raised revenue 138 percent compared to 2003. The company has been profitable since January, and claims revenues between $26 million and $50 million. The company says it is pursuing a market that was worth $5.1 billion in 2003, and is expected to grow to $7.4 billion in 2008, according to the ARC Advisory Group. But it is in a crowded field, and Emptoris competes with companies such as Verticalnet, Ariba, and Oracle.

Engim

ADDRESS 40 NagogParkActon, MA 01720

Acton, MA 01720

PHONE 1-978-206-3400

FOUNDED 2001

CEO Nick Finamore

EMPLOYEES 50

FUNDING $35 million, 2 rounds

KEY INVESTORS Benchmark Capital, Adams Street Partners, Bessemer Venture Partners, Matrix Partners

Bessemer

More than ever, people rely on Wi-Fi connections at home, work, and points in between to communicate and swap information. Engim offers a system chip that allows voice, video, and data to flow through multiple channels on the same band. That gives it an edge over Wi-Fi chips with a single channel, and allows operators to separate voice and data traffic. Engim’s technology also solves a major problem for IT managers—protecting the wireless network from hackers. Wireless modem makers can integrate intrusion-detection features into devices when they build with Engim’s chips. The company sells its chips to network equipment and security device makers, including Accton Technologies, Matrx Aerospace Broadband, and AirDefense. The company, which first targeted the enterprise market, now must successfully enter the lucrative consumer space.

eSilicon

ADDRESS 501 Macara Ave.Sunnyvale, CA94085

501 Macara Ave.Sunnyvale, CA94085

PHONE 1-408-616-4617

1-408-616-4617

FOUNDED 2000

CEO Jack Harding

EMPLOYEES 95

FUNDING $86 million, 6 rounds

KEY INVESTORS Crosspoint Venture Partners, Fremont Ventures, TPG Ventures, Crescendo Ventures, Investor Growth Capital, NIF Ventures, RWI Group, Catamount Ventures

Crosspoint Venture Partners, Fremont Ventures, TPG Ventures, Crescendo Ventures, Investor Growth Capital, NIF Ventures, RWI Group, Catamount Ventures

eSilicon oversees part or all of the design, manufacturing, testing, packaging, and shipping of specialty semiconductors for electronics companies. eSilicon coordinates chip design and production by lining up major suppliers, including Taiwan Semiconductor Manufacturing, IBM, Amkor, and ARM. The method ensures that every step of chip creation is done by the most qualified provider. eSilicon says its customers save overhead and other production costs by outsourcing the work. In contrast, large chip companies that do it all themselves sometimes stamp out substandard products. eSilicon makes most of its revenues from shipping packaged and tested chips rather than from designing and manufacturing. The company is profitable and counts Kodak, 2Wire, and PortalPlayer among its customers. Now, eSilicon must sustain its growth and find success in the European market.

Excel Switching

ADDRESS 75 Perseverance WayHyannis, MA02601

75 Perseverance WayHyannis, MA02601

PHONE 1-508-862-3000

FOUNDED 1988

CEO Marc Zionts

EMPLOYEES 180

FUNDING N/A

KEY INVESTORS N/A

Excel Switching, a 17-year-old telecom hardware vendor, has weathered more industry shifts than the average private tech company. After nine years of growth, Excel went public in 1997, was bought by Lucent for $1.7 billion in 1999, and finally spun off as an independent company in 2003. With so many monumental shifts in tow, Excel recently launched its first new gateway and media server products in over 10 years—a company milestone in itself. Excel says its platforms are in 50 percent of telecommunications networks worldwide, including major customers like Verizon, MCI, and Motorola. But as the telecom equipment market increasingly looks to cutting-edge next-generation networks, companies releasing one product a decade might lose out.

Fluidigm

ADDRESS 7100 Shoreline CourtSouthSan Francisco, California94080

7100 Shoreline CourtSouthSan Francisco, California94080

PHONE 1-650-266-6000

FOUNDED 1999

CEOGajus Worthington

EMPLOYEES N/A

FUNDING N/A

KEY INVESTORSInterWest Partners, GE Equity, Euclid SR Partners, Versant Ventures, Lehman Brothers Venture Partners, The Invus Group

Euclid

Fluidigm isn’t the only Red Herring 100 company to have had its work featured on the cover of a top science research journal, but the November 4, 2004, Nature cover puts it in a select group. The company manufactures fluidic circuits that increase efficiency in biomedical research. The chips, though smaller than 10 square centimeters, can hold 10,000 experiments at one time. The circuits are particularly useful for researchers looking at what conditions cause proteins to crystallize; these crystals are useful in determining a protein’s arrangement of atoms, which helps design drugs that can target the right molecule to cure disease. The company may have been through ups and downs since its founding, but it now has strong revenues and top-of-the-line technology. Fluidigm needs to diversify, though; it licenses its technology from a single source, and has nothing to fall back on if that well runs dry.

Nature

Fortinet

ADDRESS 920 Stewart Dr.Sunnyvale, CA94085

920 Stewart Dr.Sunnyvale, CA94085

PHONE 1-408-235-7700

FOUNDED 2000

CEO Ken Xie

EMPLOYEES 550

FUNDING $93 million, 5 rounds

KEY INVESTORS Redpoint Ventures, Meritech Capital, Defta Partners, Acorn Campus

Founded by former NetScreen CEO Ken Xie, Fortinet sells a network appliance designed to deflect digital attacks. Analyst firm IDC estimates that in the first half of 2004, the company accounted for 22.6 percent of the market for what it calls “Unified Threat Management,” or an effective all-in-one security device. Fortinet provides antivirus, anti-spam, content filtering, intrusion-detection and prevention, firewall, and virtual private network features, all in one box. IDC predicts that by 2007, 80 percent of all security solutions will be delivered via a dedicated appliance like Fortinet’s. The company’s simple approach to security drove sales to $56 million in 2004, up from $22 million in 2003. However, Fortinet’s competitors also recognize the increasing demand for simplified security devices, and the company will have to outpace ServGate, Juniper, and security giant Symantec to stay ahead in the market.

FrontBridge Technologies

ADDRESS 4640 Admiralty WayMarinadelRey, CA90292

MarinaRey, CA90292

PHONE 1-310-302-0500

FOUNDED 1999

CEOSteve Jillings

EMPLOYEES 140

FUNDING $26 million, 4 rounds

KEY INVESTORSSierra Ventures, Bank of America Venture Partners, Focus Ventures

America

There’s nothing interesting about an email services company in 2005, unless the company has a novel and edgy business plan. FrontBridge Technologies says it fits the bill. The company has started selling its product to IT companies and telecoms that resell it under their own brands. Private-label customers include VeriSign, IBM, Sprint, and NEC. It’s the fastest-growing part of its fast-growing business, which includes the email services basics of blocking spam and viruses, storing old mail, and hunting down lost mail when it disappears. Gartner expects the managed security service provider market to hit $3 billion by 2006, up from $1.6 billion in 2005. FrontBridge can’t relax, though; it faces serious competition from the likes of Postini and Message Labs.

Genomic Health

ADDRESS 301 Penobscot Dr.Redwood City, CA94063

301 Penobscot Dr.Redwood City, CA94063

PHONE 1-650-556-9300

FOUNDED 2000

CEORandy Scott

EMPLOYEES N/A

FUNDING N/A

KEY INVESTORSKleiner Perkins Caufield & Byers, Pfizer, Texas Pacific Group, JP Morgan Partners, Credit Suisse First Boston

Boston

Genomic Health is set to capitalize on the much-talked-about shift toward personalized medicine. At last December’s Annual San Antonio Breast Cancer Symposium, the company announced that its OncoType DX diagnostic test works. By looking at the activity of 21 genes involved in breast cancer, the test puts a “recurrence score” from one to 100 on the likelihood that the disease will re-occur, and predicts how likely a patient is to benefit from taking a common chemotherapy treatment. Breast cancer is the second most common cause of cancer death among American women after lung cancer, so the market opportunity is certainly there. With good technology and A-list board members such as Brook Byers, it is difficult to see this company failing. However, some say that the company’s foundational technology would be improved if it could test for more genes, and this suggests there’s a place for a good competitor.

Gracenote

ADDRESS 2000 Powell St., Suite 1380Emeryville, CA94608

2000 Powell St., Suite 1380Emeryville, CA94608

PHONE 1-510-547-9680

FOUNDED 1998

CEO Craig Palmer

EMPLOYEES 137

FUNDING $36 million, 4 rounds

KEY INVESTORS Scott Jones, Sequoia Capital, Simon Investors, Bessemer Venture Partners

Bessemer

Gracenote offers digital audio and video identification, as well as music management services for CDs and digital files. Its Playlist technology identifies the exact genre of song on your PC playlist and plays it with a push of a button. The company’s upcoming mobile technology will help users find new content and make direct purchases from their phones, in addition to offering mobile music identification. The products, which are sold to developers of consumer electronics and mobile devices, are ultimately targeted at the car audio, portable, consumer electronics, and mobile markets. Gracenote sells to customers such as Apple’s iTunes, Panasonic, and Sony. But the company is playing in a market where many have yet to find successful business models, and it may be years before Gracenote finds a lucrative niche.

Greenway Medical Technologies

ADDRESS 121 Greenway Blvd.Carrollton,GA30117

121 Greenway Blvd.Carrollton,GA30117

PHONE 1-770-836-3100

FOUNDED 1998

CEO Tommy Green

EMPLOYEES 161

FUNDING $62.8 million, 5 rounds

KEY INVESTORS Investor Group, Investors Growth Capital

Among professionals, physicians are reputed to be the most resistant to new IT. But Tommy Green, the CEO of Greenway Medical Technologies, says his company is up to the task. Greenway markets PrimeSuite, a web-based software suite that includes electronic medical records and managed care solutions for doctors’ offices. It’s a Microsoft .NET-based package with a browser user interface that doesn’t require a lot of technical training or complex support—two deal killers for busy doctors. Using a familiar operating system and integrating three or more functions into a single suite keeps the technology simple and as unobtrusive as possible. Doctor obstinacy makes it a tough market, but it is lucrative. With prodding from the White House, the healthcare industry is bound to go digital.

Idetic

ADDRESS 2855 Telegraph Ave., Suite 510Berkeley, CA94705

2855 Telegraph Ave., Suite 510Berkeley, CA94705

PHONE 1-510-981-1303

FOUNDED 1999

CEO Phillip Alvelda

EMPLOYEES 100

FUNDING $15 million, 2 rounds

KEY INVESTORS Menlo Ventures, Redpoint Ventures, Gefinor Ventures, Sorrento Ventures

Sorrento

Idetic only went live with MobiTV, a global television network on handsets, in 2003, but it is already profitable. Content providers send video and audio data to MobiTV, which converts it to a format that can be streamed over telecom providers’ networks. Customers include Sprint, Cingular/AT&T, and Midwest Wireless, and Idetic announced in April that Roger’s Mobile and Bell Mobility would also start carrying MobiTV within the next three months. Idetic has partnerships with major content providers, including ABC News Now, NBC Mobile, MSNBC, Fox Sports, Discovery Channel, and ToonWorld. However, it remains to be seen whether consumers want to watch TV on their handsets, considering today’s small screen sizes and battery limitations.

IE-Engine

ADDRESS 1601 Trapelo Rd., Suite 328Waltham, MA02451

1601 Trapelo Rd., Suite 328Waltham, MA02451

PHONE 1-781-697-2880

FOUNDED 1999

CEO Paul Daoust

EMPLOYEES 52

FUNDING $23.5 million, 1 round

KEY INVESTORS Kodiak Venture Partners; RBC Capital Partners; Adams, Harkness Ventures; Four Quarters

Adams

IE-Engine’s human resources cost-management software and services help companies deal with the increasing costs of employee benefits. The company boasts that customers save five times more than they spend on IE-Engine. Besides supporting all aspects of benefits, IE-Engine’s system also creates transparency in the benefits-buying process—which makes for an auction-like environment in which corporate healthcare buyers can get lower prices. IE-Engine appeals to a wider base of clients by providing a hosted subscription service or an outsourced solution. Its impressive list of customers includes Ford, Toyota, Staples, Pitney Bowes, and Rite Aid. It’s also bagged new executives—Paul Daoust, for 30 years the CEO of GRX Technologies, and Michael Byers, former CEO of Centiv. But IE-Engine works with existing technologies rather than creating new ones, which might be a disadvantage if a competitor comes up with an industry-changing invention.

Toyota

Ikanos Communications

ADDRESS 47669 Fremont Blvd.Fremont, CA94538

47669 Fremont Blvd.Fremont, CA94538

PHONE 1-510-979-0400

FOUNDED 1999

CEO Rajesh Vashist

EMPLOYEES 160

FUNDING $100.9 million, 5 rounds

KEY INVESTORS Sequoia Capital, Walden International, Greylock Partners, TeleSoft Partners, Ridgewood Capital, JP Morgan Partners, TL Ventures, Intel Capital

Sequoia Capital, Walden International, Greylock Partners, TeleSoft Partners, Ridgewood Capital, JP Morgan Partners, TL Ventures, Intel Capital

The competition among voice, video, and data service providers is hotter than ever. And telecoms looking to minimize the installation of expensive fiber-optic lines can turn to Ikanos Communications for a solution. Ikanos sells system chips and software that allows telephone companies to juice up legacy copper lines into broadband pipelines that can deliver speeds of 100 Mbps. The chips are programmable, allowing equipment makers and carriers to modify their networks to fit various international standards. The flexibility also lets customers provide better services while keeping a lid on costs. Ikanos, which is profitable, sells primarily to telecom equipment makers in Japan and South Korea, including NEC, Sumitomo Electric Industries, and Dasan Networks. Ikanos now has to find success selling to U.S. and European customers.

JapanU.S.

Impinj

ADDRESS 501 N. 34th St.Seattle, WA98103

501 N. 34th St.Seattle, WA98103

PHONE 1-206-517-5300

1-206-517-5300

FOUNDED 2000

CEO William Colleran

EMPLOYEES 80

FUNDING $52 million, 3 rounds

KEY INVESTORS ARCH Venture Partners, Polaris Venture Partners, Mobius Venture Capital, UPS Strategic Enterprise Fund, Madrona Venture Group, Unilever Technology Ventures, Andrew Viterbi

Madrona Venture Group, Unilever Technology Ventures, Andrew Viterbi

Radio frequency identification (RFID) technology continues to be adopted by retailers and other companies seeking secure ways to identify and organize merchandise and equipment. The RFID market is expected to reach $2.7 billion in 2007, spurred in part by mandates by the likes of Wal-Mart and the U.S. Department of Defense, which have asked their suppliers to use RFID. Impinj is well-poised to take its share of the spoils. The company produces low-power, long-range products, such as chips, wafers, and tags, to customers who assemble and package them into RFID products. Impinj has about 20 customers, including Taiwan Semiconductor Manufacturing, Motorola, and Analog Devices. Over the past six months, Impinj has seen an upswing in sales by booking orders worth $23 million. Still, the company is up against tough competitors, including Philips.

Ingenio

ADDRESS 100 California St., Suite 400San Francisco, CA94111

100 California St., Suite 400San Francisco, CA94111

PHONE 1-415-248-4000

FOUNDED 1999

CEO Mark Britto

EMPLOYEES 93

FUNDING $112 million, 3 rounds

KEY INVESTORS Benchmark Capital, The Carlyle Group, Draper Fisher Jurvetson, eBay, Impact Venture Partners, Microsoft, Pyramid Technology Ventures, Vulcan Ventures

Ingenio started life as an online advice-exchange platform, but now it wants a piece of the $4-billion online advertising market. Ingenio’s pay-per-call service is an offshoot of the popular pay-per-click form of performance marketing that has advertisers shelling out money each time viewers click on ads that link to their web sites. Search companies Google and Yahoo owe much of their recent success to the popularity of pay-per-click. If Ingenio’s pay-per-call service takes off, it could enjoy the same fortune. Pay-per-call advertisements target small businesses that don’t have web sites, but want an Internet presence. They list phone numbers, which are routed through Ingenio’s servers, instead of web sites. Advertisers pay only if a consumer actually picks up the phone and calls. The upside: 60 percent of small businesses don’t have web sites. The downside: a lot of them have probably never heard of pay-per-call.

Interwise

ADDRESS 25 First St., Suite 412Cambridge, MA02141

25 First St., Suite 412Cambridge, MA02141

PHONE 1-617-475-2200

FOUNDED 1994

CEO Frank Zvi

EMPLOYEES 130

FUNDING $90.7 million, 4 rounds

KEY INVESTORS Lazard Technology Partners, STI, 75 Wall Street Partners, Fibi Invest, Eris Consultancy, Leeds Equity Partners, GE Capital, UBS Capital

Leeds

Not long ago, video conferencing and voice conferencing were separate technologies and separate businesses—the former had its own separate room with a portable screen and a shaky picture. But things have changed. Companies like Interwise now offer voice, video, and data in a single product. Interwise’s ECP Connect is an IP-based conferencing tool that even firms on a strict budget can afford, says the company. ECP Connect’s licensing allows unlimited users for unlimited sessions, rather than the per-minute or per-user charges that have limited video conferencing technology to companies with deep pockets. With the emergence of IP as the protocol of choice, the barrier to entry in this market is low, so Interwise will have to innovate to stay ahead.

ECP Connect is an IP-based conferencing tool that even firms on a strict budget can afford, says the company. ECP Connect’s licensing allows unlimited users for unlimited sessions, rather than the per-minute or per-user charges that have limited video conferencing technology to companies with deep pockets. With the emergence of IP as the protocol of choice, the barrier to entry in this market is low, so Interwise will have to innovate to stay ahead.

Intransa

ADDRESS 2870 Zanker Rd., Suite 200San Jose, CA95134

2870 Zanker Rd., Suite 200San Jose, CA95134

PHONE 1-408-678-8600

FOUNDED 2000

CEO Avi Katz

EMPLOYEES N/A

FUNDING N/A

KEY INVESTORS Advanced Technology Ventures, Menlo Ventures, Sofinnova Ventures

Intransa sells IP storage area network (SAN) products that have more capacity and greater speed than those of its competitors. The company’s networked Grid Storage solutions can fit into existing IP networks, making it easy to deploy and manage while requiring fewer resources. Intransa, a profitable company, offers customers—from small businesses to large enterprises—software packages and, if they want, the technological means to have greater control. Its partners include Oracle, SAP, and IBM. Intransa CEO Avi Katz and CFO Greg Ayers each have more than two decades of experience at technology companies, while CTO/founder Peter Wang owns 13 U.S. technology patents. But competition is stiff; Network Appliance, Adeptec, and QLogic are just a few of the many rivals that Intransa must beat.

U.S.

IP Unity

ADDRESS 475 Sycamore Dr.Milpitas, CA95035

475 Sycamore Dr.Milpitas, CA95035

PHONE 1-408-582-1100

FOUNDED 1999

CEO Arun Sobti

EMPLOYEES 130

FUNDING $79 million, 5 rounds

KEY INVESTORS Battery Ventures, New Enterprise Associates, Kleiner Perkins Caufield & Byers, Partech International, Siemens Venture Capital, Telus Ventures, TeleSoft Partners, Goldman Sachs, Presidio Ventures

Siemens Venture Capital, Telus Ventures, TeleSoft Partners, Goldman Sachs, Presidio Ventures

As cable companies, telecoms, and other communications companies fight over what industry will offer the quadruple play—voice, video, data, and wireless—IP Unity looks to find sales in convergence. The company’s media server bridges wireline, cable, and wireless networks, giving its carrier customers the ability to deliver a single set of features. IP Unity has won over customers like BellSouth, Cablevision, China Telecom, and Comcast. The company also partners with integrators such as Siemens, Motorola, Cisco, and IBM. In the past six months, IP Unity has managed to sign up its first mobile carriers, starting with two Indian firms, Bharat Sanchar Nigam Limited (BSNL) and HFCL Infotel (HITL). But having so many types of customers could prove a disadvantage; if the company tries to cater across the board, it could potentially miss betting on the winning industry for the quadruple play.

Cablevision, China

Isilon Systems

ADDRESS 220 W. Mercer St.Seattle, WA98119

220 W. Mercer St.Seattle, WA98119

PHONE 1-206-315-7500

FOUNDED 2001

CEO Steve Goldman

EMPLOYEES 130

FUNDING $40 million, 3 rounds

KEY INVESTORS Lehman Brothers Venture Partners, Sequoia Capital, Atlas Ventures, Madrona Venture Group

While traditional storage companies like EMC and IBM cater to the general storage market, Isilon Systems’ unique selling point is its focus on the storage of digital content. The Yankee Group forecasts that digital content will comprise 39 percent of enterprise storage by 2006. Isilon’s clustered storage system works in building blocks and can be scaled from four to 169 terabytes (1 terabyte=1,024 gigabytes) as and when required. The company serves a wide range of industries, including media and entertainment, the federal government, life sciences, and oil and gas. Isilon’s customers include NBC Sports, Corbis, and Sony Pictures Imageworks. Although the company has created a niche in the storage market, it faces competition from no less than the big five—IBM, EMC, Hitachi, Hewlett-Packard, and Sun.

Hitachi

Kinexus Bioinformatics

ADDRESS 6190 Agronomy Rd., Suite 402Vancouver, CanadaV6T 1Z3

6190 Agronomy Rd., Suite 402Vancouver, CanadaV6T 1Z3

PHONE 1-604-822-9963

FOUNDED 1999

CEODr. Steven Pelech

EMPLOYEES 19

FUNDING Approximately $2.9 million, 3 rounds

KEY INVESTORSMilestone Medica, Pender Growth Fund, BIRC

After the completion of the Human Genome Project, Kinexus Bioinformatics CEO Steven Pelech says that the biomedical community is currently in a period of “molecular stamp collecting”—gathering details about how genes and proteins interact without yet understanding enough of the data to meet medical needs.Kinexus provides information to researchers and bioscience companies about which amino acids and molecular structures make up a protein molecule. To be sure, other databases abound, but Kinexus’ protein database—which took five years to build and contains the results of around 9,000 experiments—has an edge over others because it includes data on protein activity, and not just structure.If Kinexus really is growing at 60 percent a year as it claims, and is able to charge the very low subscription rate in the field of $1,000 per user per year, the company’s future looks good.

Konarka Technologies

ADDRESS 100 Foot of John St.Boott Mill South, Third Floor, Suite 12

Suite 12

Lowell, MA01852

PHONE 1-978-569-1400

FOUNDED 2001

CEO Howard Berke

EMPLOYEES 40

FUNDING $32.5 million, 3 rounds

KEY INVESTORS New Enterprise Associates, Draper Fisher Jurvetson, Vanguard Ventures, Partech International, Good Energies

Enterprise

Konarka Technologies brings solar power to power-hungry consumer electronics and other products. The company says its solar strips and fiber weigh less than traditional solar products and cost two-thirds less. The plastic operates using any visible light, not just the sun, and its flexibility allows it to work on many devices. In the last year, Konarka acquired Siemens’ organic photovoltaic research department, received its first product orders from the military, and developed a photovoltaic fiber for solar fabrics. Customers include the U.S. Army and Air Force, and partners include ChevronTexaco, Eastman Chemical Company, Electricité de France, and Siemens. But Konarka’s success will depend on delivering its first product and entering full production in the next few months. It also faces competition from other solar manufacturers and startups, new battery technologies, and—eventually—fuel cells.

LANDesk Software

ADDRESS 698 West 10000 SouthSouth Jordan, UT 84095

, UT 84095

PHONE 1-801-208-1500

FOUNDED 2002

CEO Joe Wang

EMPLOYEES 460

FUNDING N/A

KEY INVESTORS Intel Capital, Vector Capital, vSpring Capital

A leader in desktop software distribution—the stuff that lets IT guys sleep at night—LANDesk Software has been profitable for its nearly three-year existence. An Intel spin-off, the company came pre-packaged with a management team and a successful product. The LANDesk product suite has a customer list of heavyweights, from Coca-Cola to Toshiba to the U.S. Department of Defense, and is known for its rapid deployment and adjustment. In a sector full of public companies, LANDesk is one of the last holdouts—but CEO Joe Wang has been more than suggestive about his hopes for an IPO. Gartner has predicted that the offering will happen before the end of 2005. It will be interesting to see the coddled company grow up and experience the financial disclosures, procedural holdups, and accountability of the public eye.

Levanta

ADDRESS 650 Townsend St., Suite 225San Francisco, CA94103

650 Townsend St., Suite 225San Francisco, CA94103

PHONE 1-415-354-4878

FOUNDED 2004

CEO Matt Mosman

EMPLOYEES 30

FUNDING $6.6 million, 1 round

KEY INVESTORS Morgenthaler Ventures, vSpring Capital, Walden International

The Linux movement may not have conquered the world of mission-critical applications, but it has made enough inroads everywhere else to have become a global force. Levanta markets a system that allows IT personnel to quickly deploy and administer Linux servers. The product also covers web server updating, patch management, and Sarbanes-Oxley compliance. The system is hardware independent, so it enables higher server utilization rates and greater availability, according to Levanta. The company says it has customers in a wide range of industries, from video game publishing to retail to government. Levanta has an uphill task considering that the Linux market in the United States has just begun to pick up steam, but its tool offers deployment advantages that are difficult to come by in this still-emerging space.

United States

LGC Wireless

ADDRESS 2540 Junction Ave.San Jose, CA95134

2540 Junction Ave.San Jose, CA95134

PHONE 1-408-952-2400

FOUNDED 1995

CEOIan Sugarbroad

EMPLOYEES 92

FUNDING $80 million, 5 rounds

KEY INVESTORSAVI Capital, Mayfield Fund, Allegis Capital, Crystal Ventures, Intel Capital, Ontario Municipal Employees Retirement System, Fortune Technology, GSM Capital

Mayfield Fund, Allegis Capital, Crystal Ventures, Intel Capital, Ontario Municipal Employees Retirement System, Fortune Technology, GSM Capital

LGC Wireless offers innovative means of propagating wireless signals inside buildings and in dense metropolitan areas, where concrete and steel often obstruct signals. LGC’s technology supports all existing mobile telephony standards as well as Wi-Fi and related 802.11 standards. But the real advantage LGC has over competitors is that its technology uses existing cabling schemes in a building, thereby eliminating the need—and the cost—of rolling out additional cable. LGC can even use low-bandwidth cable to propagate wireless signals without degradation, by changing RF signals to a lower frequency suitable for transport at one end and then restoring them to higher-frequency RF at the other end. LGC, which sells to enterprises and to carriers, has seen its systems installed in airports, stadiums, skyscrapers like the PetronasTowers in Kuala Lumpur, Malaysia, and in the headquarters of one particularly tough customer: the U.S. Federal Communications Commission.

PetronasKuala Lumpur, Malaysia

Mimeo.com

ADDRESS 460 Park Avenue, Eighth FloorNew York, NY10016

460 Park Avenue

PHONE 1-800-466-4636

FOUNDED 1998

CEO John Delbridge

EMPLOYEES 175

FUNDING $50 million, 5 rounds

KEY INVESTORS Draper Fisher Jurvetson, Draper Fisher Jurvetson Gotham, HarbourVest Partners, GE Commercial Finance Technology Lending, Hewlett-Packard

, Hewlett-Packard

More than 1,000 companies use Mimeo.com’s on-demand document service, which automates the stages of a document life cycle from creation to delivery. Using their desktop, customers can create documents and then request printing, binding, and delivery. Mimeo processes the orders in its facilities in Memphis, Tennessee, and delivers documents the next day anywhere in the United States, via partnerships with Federal Express, DHL, and UPS. The profitable company boasts customers such as JetBlue, Pfizer, and Citi. Mimeo raised $9 million in funding in April, which will primarily go toward expanding its sales and marketing team. The company will need the extra manpower to compete with FedEx Kinko’s and local copy centers, which can deliver the documents the same day.

Tennessee

Model N

ADDRESS 5000 Shoreline Court, Suite 301South San Francisco, CA94080

5000 Shoreline Court, Suite 301South San Francisco, CA94080

PHONE 1-650-808-8200

FOUNDED 1999

CEO Zack Rinat

EMPLOYEES 109

FUNDING 41 million, 2 rounds

KEY INVESTORS Meritech Capital Partners, Accel Partners, AccelKKR

Model N offers a suite of revenue management applications that enables companies to link together and automate the inter-departmental processes of pricing, contract management, and settlements. Model N can address various needs since its applications can be used separately or together as a full set. The applications help companies comply with government regulations like Sarbanes-Oxley and Medicaid, and also prevent revenue leakage. Model N has a long list of customers that includes pharmaceutical companies Bristol-Myers Squibb, Pfizer, and Johnson & Johnson. Its partners include Oracle, SAP, and IBM. But with its licensing prices starting at about half a million dollars, Model N could severely limit its potential customer base.

Motricity

ADDRESS 2800 Meridian Pkwy., Suite 150Durham, NC27714

2800 Meridian Pkwy., Suite 150Durham, NC27714

PHONE 1-919-287-7400

FOUNDED 1999

CEO Ryan Wuerch

EMPLOYEES 180

FUNDING $47 million, 4 rounds

KEY INVESTORS Technology Crossover Ventures, New Enterprise Associates, Intel Capital, Massey Burch Capital, Wakefield Group, Noro-Moseley Partners

Motricity says that Cingular Wireless, the largest cellular carrier in the United States, has used its technology to reach $1 million per day in mobile content sales for the first time. After six years of building the company with $47 million in funding, Motricity has little trouble convincing carriers to license its Fuel platform. The technology creates a mobile content distribution system that uses software to ease the delivery on both ends of the chain. Customers like Verizon Wireless, mmO2, and Sprint leverage the service to reduce costs and raise revenues. Over the next year the company will continue to sign up new customers across the globe as its technology proves invaluable. But if the company doesn’t hit another home run to follow Fuel’s success, revenues will taper off as the technology becomes pervasive.

United States

Nanosolar

ADDRESS 2440 Embarcadero WayPalo Alto, CA94117

2440 Embarcadero WayPalo Alto, CA94117

PHONE 1-650-565-8891

FOUNDED 2001

CEO R. Martin Roscheisen

EMPLOYEES <30

FUNDING $38 million, 2 rounds

KEY INVESTORS Benchmark Capital, Stanford University, U.S. Venture Partners, Larry Page, Sergey Brin

Stanford University, U.S.

While nano-based solar competitors like Konarka and Nanosys seem focused on consumer electronics, Martin Roscheisen is thinking bigger. Nanosolar aims to provide solar cells for commercial, residential, and utility-scale ground installations that are 10 times as efficient as traditional cells. Because the main factor holding back renewable energy sources remains high costs, the first company that develops price-competitive solar cells stands to make a pile of cash. To that end, Nanosolar remains aggressive about maturing from a small technology company into a lucrative energy business. The company is expanding its management team to help make a push toward commercializing 120-MW-capacity cells by 2006. To make ends meet in the meantime, the company is relying on government grants, including $10.5 million from the U.S. Department of Defense’s DARPA.

Nanosys

ADDRESS 2625 Hanover St.Palo Alto, CA94304

2625 Hanover St.Palo Alto, CA94304

PHONE 1-650-331-2100

FOUNDED 2001

CEO Calvin Chow

EMPLOYEES 50

FUNDING $55 million, 3 rounds

KEY INVESTORS ARCH Venture Partners, China Development Industrial Bank, CW Ventures, Harris & Harris, Intel Capital, Kodak, Polaris Venture Partners, Prospect Venture Partners, United Overseas Bank, Venrock Associates

In nanotech—a field full of promise but as much as a decade from maturity—it’s tough to predict eventual winners and losers, but Nanosys stands out. Like the field itself, Nanosys is a company with a broad, bold vision: applying its technology to everything from fuel cells to computer memory. The company has yet to sell a single product, but it has strong backing and intellectual property. It has garnered close to $30 million in government contracts, some contingent on milestones, and filed more than 350 patent applications. The company’s core technology is fabricating nanostructures from inorganic materials like silicon. Nanosys just signed a partnership deal with Sharp, and beta products in mass spectrometry and lighting are on the way, but only a revenue stream will silence critics.

Narus

ADDRESS 500 Logue Ave.Mountain View, CA94043

500 Logue Ave.Mountain View, CA94043

PHONE 650-230-9300

FOUNDED 1997

CEO Greg Oslan

EMPLOYEES 90

FUNDING $75 million

KEY INVESTORS JP Morgan Partners, NeoCarta Ventures, Mayfield, Walden International, Intel, AT&T, KPMG, NTT Software, Presidio Venture Partners, Sumisho Electronics, Bowman Capital

Narus builds software products that help telecom networks capture and analyze data. Its competitive edge is that it can aggregate data across different networks, as opposed to just one at a time. It’s reaching out to telecom companies across the world with the promise of cost savings—and they’re buying. AT&T, T-Mobile, Korea Telecom, and Access Bolivia are some of the names on its client list. Narus is already profitable and has partnerships in place with IBM, NEC, and Datacraft. Its team has a history in wireless, networking, and successful startups, which bodes well for the company. Where’s the risk? Narus’ fate is pegged to the tumultuous fortunes of the telecom industry. It needs to work with an industry that still has to embrace—and to some degree, understand—IP-based communications.

Korea

NetForensics

ADDRESS 200 Metroplex Dr.Edison, NJ08817

200 Metroplex Dr.Edison, NJ08817

PHONE 1-732-393-6000

FOUNDED 1999

CEO Rajeev Khanolkar

EMPLOYEES 110

FUNDING $32 million, 3 rounds

KEY INVESTORS Cisco Systems, Nomura International, Comcast, Dawntreader

Fund, Storm Ventures, Feld Group (now EDS)

NetForensics makes security information management software that collects, analyzes, and presents data from various types of security devices and programs installed on corporate networks. From a central console, it provides analysis and interpretation of digital attacks to administrators and auditors to help companies deal with the ever-increasing headache of IT security. NetForensics can collect data from intrusion-detection and prevention engines, firewalls, antivirus software, and a myriad of other security products. Two years ago, Gartner estimated revenue in this market segment at $100 million, but analyst Mark Nicolett says it has grown rapidly since. NetForensics works with integrators such as Northrop Grumman, Lockheed Martin, EDS, IBM, and Hewlett-Packard. It faces competition from ArcSight, but the market has supported both companies so far. Cisco’s December 2004 acquisition of another competitor, Protego, will make it hard for NetForensics to cozy up to the networking giant.

NetQoS

ADDRESS 6504 Bridge Point Pkwy., Suite 501Austin, TX78730

6504 Bridge Point Pkwy., Suite 501Austin, TX78730

PHONE 1-512-407-9443

FOUNDED 1999

CEOJoel Trammell

EMPLOYEES 75

FUNDING $21 million, 3 rounds

KEY INVESTORSLiberty Partners

Partners

NetQoS’ software is designed to ensure smooth application delivery over corporate networks. Its two software products are sold preloaded in off-the-shelf server appliances. One, deployed on key aggregation routers, collects and analyzes 100 percent of traffic data on enterprise wide area networks (WANs), diagnosing problems, identifying sources of congestion, and automatically flagging bottlenecks in performance so that network engineers can respond quickly. The other analyzes end-user experience by looking at application response times on a WAN, but is deployed centrally, and not on individual end-user terminals. The profitable NetQoS was named the fastest-growing technology company in Texas by Deloitte & Touche for 2004, with 9,400 percent growth over a five-year period. It accomplished this by targeting major multinationals with global WANs—enterprises with both the need for such a product and the wherewithal to pay for it.

Texas

NetScaler

ADDRESS 180 Baytech Dr.San Jose, CA95134

180 Baytech Dr.San Jose, CA95134

PHONE 1-408-678-1600

FOUNDED 1999

CEO B.V. Jagadeesh

EMPLOYEES 210

FUNDING $80 million, 5 rounds

KEY INVESTORS Sequoia Capital, Goldman Sachs, Gabriel Venture Partners, Focus Ventures, Granite Global Ventures, Bay Partners

NetScaler has two patents on the software it sells, which is installed on appliances that accelerate Internet applications. The software exploits the basics of Internet exchanges—the Transmission Control Protocol, or TCP. Each time a web browser makes a request to a web server, it opens a TCP channel, receives the data, then closes the TCP channel. Opening and closing the channel takes time and processor power. NetScaler says it can increase performance by a scale of three to five times by keeping the TCP channel open during a web-browsing session. “It’s like laying the freeway and using it again and again instead of tearing it down and rebuilding it each time you want to go someplace,” says CEO B.V. Jagadeesh. The company increased revenue 120 percent between 2003 and 2004, but Mr. Jagadeesh doesn’t expect profitability until the first quarter of 2006.

NexTag

ADDRESS 1300 S. El Camino Real, Suite 600San Mateo, CA94402

600San Mateo, CA94402

PHONE 1-650-645-4700

FOUNDED 1998

CEO Purnendu Ojha

EMPLOYEES 250

FUNDING $12.8 million, 3 rounds

KEY INVESTORS Morgenthaler Ventures, Technology Crossover Ventures

NexTag wants to help the growing number of online shoppers decide what to buy and whom to buy it from. Though comparison shopping search engines are sprouting up by the dozen these days, NexTag’s seven-year head start gives it a considerable lead. It’s already profitable and has established relationships with powerful vendors like Amazon.com, CircuitCity, Neiman Marcus, and Target. While it also makes money through its online advertising network, merchants are its primary source of revenue. When shoppers click on the product listed by a merchant, NexTag pockets a fee. But that advantage can turn into a liability—as the competition in this area intensifies, other similar sites are looking to compete on the basis of objectivity and a vendor-neutral platform.

CircuitCity

ObjectVideo

ADDRESS 11600 Sunrise Valley Dr., Suite 290Reston, VA20191

11600 Sunrise Valley Dr., Suite 290Reston, VA20191

PHONE 1-703-654-9300

FOUNDED 1998

CEO Raul Fernandez

EMPLOYEES 80

FUNDING $31 million, 4 rounds

KEY INVESTORS Novak Biddle Venture Partners, Updata Ventures, Blacksmith Capital, CMGI Ventures, ABS Ventures

ObjectVideo sells software that analyzes digital video feeds and looks for anomalies. The software can spot an intruder on an industrial site, keep track of how long a suspicious van has been sitting in the parking lot, or even set up virtual tripwires. The company hopes its automated monitoring software will replace expensive rent-a-cops watching video feeds. ObjectVideo’s technology has attracted a strong customer base among government agencies, including the U.S. Department of Homeland Defense’s Customs and Border Protection agency, the Department of Defense, the Air Force, and DARPA. In the private sector, the company has demonstrated traction with large chemical and petroleum producers. ObjectVideo claims its surveillance system covers more perimeter miles than any other product, but it faces competition from companies like VistaScape.

VistaScape.

Perlegen Sciences

ADDRESS 2021 Stierlin CourtMountain View, CA94043

2021 Stierlin CourtMountain View, CA94043

PHONE 1-650-625-4500

FOUNDED 2000

CEOBrad A. Margus

EMPLOYEES 100

FUNDING $207 million, 3 rounds

KEY INVESTORSCSK Venture Capital, Brookside Capital, Unilever Ventures, Biofrontier Partners

Brookside

Perlegen Sciences closed a $74-million round at the end of February, which it says it will use to develop individualized therapies according to patients’ genetic characteristics—an area known in the industry as personalized medicine. The Affymetrix spin-off has clearly demonstrated its scientific capabilities by developing a method of speed-reading DNA, which the company used to replicate the decade-plus work of the $3-billion Human Genome Project in less than half the time and with just $100 million. It conducts studies for many of the biggest names in pharmaceuticals. However, companies with top sequencing technologies have previously taken a hit when they realized good science also needs a good business plan. Until it has its own drugs on the market, Perlegen aims to make money from research, milestone, and royalty payments.

Prolexic Technologies

ADDRESS 1930 Harrison St.Hollywood, FL33020

1930 Harrison St.Hollywood, FL33020

PHONE 1-954-620-6002

FOUNDED 2004

COO Darren Rennick

EMPLOYEES 20

FUNDING $1.75 million, 1 round

KEY INVESTORS Angel investors

Distributed denial-of-service (DDoS) attacks are a painful and costly reminder of the Internet’s downsides. In these attacks, perpetrators attempt to flood or overwhelm a business web site, preventing them from accessing information or providing services—and often costing the victims dearly in lost revenue and repair expenses. Prolexic Technologies’ service is designed to intercept these attacks upstream from customers and clean the data traffic to eliminate network downtime. It claims it can handle DDoS attacks in excess of 1 gigabit per second. The company has established network operations in four co-located sites in North America and Europe—London, Miami, Phoenix, and Vancouver—and has plans for one in Asia. Going forward, it will have to extend its security footprint and attract large corporate accounts with its security-cleansing proposition.

LondonPhoenixAsia

Qovia

ADDRESS 7470 New Technology Way, Suite EFrederick, MD21703

EFrederick, MD21703

PHONE 1-301-846-0020

FOUNDED 2002

CEO David Woodall

EMPLOYEES 45

FUNDING $16.1 million, 2 rounds

KEY INVESTORS Canaan Partners, BlueRun Ventures (formerly Nokia Venture Partners), Anthem Capital, Maryland Department of Business and Economic Development Fund

Maryland

Qovia is a big player in the fast-growing VoIP market with products designed from scratch that unite all monitoring and management within a VoIP network. Its technology was designed specifically for VoIP, rather than revamping data management tools. As a result, Qovia promises more reliable IP phone capabilities. The company compares its service to “watching CNN live” while competitors are “like reading the newspaper the next day.” Qovia has applied for patents on its call quality-monitoring and management software. Its major customers include Friedman, Billings, Ramsey Group and government entities like the U.S. Coast Guard, the City of Jacksonville, North Carolina, and the Ohio Education Association. Qovia might benefit from targeting more customers in the private sector, as government clients are notoriously fickle and tight-fisted.

Reactrix Systems

ADDRESS 1680 Bayport Ave.San Carlos, CA94070

1680 Bayport Ave.San Carlos, CA94070

PHONE 1-650-413-1200

FOUNDED 2002

CEO Mike Ribero

EMPLOYEES 63

FUNDING $23 million, 3 rounds

KEY INVESTORS Worldview Technology Partners, Mobius Venture Capital, Thomas Weisel Venture Partners

In a world of omnipresent advertising, Reactrix Systems markets an advertising product that actually entertains while it woos the prospective customer. The Reactrix Media display technology started out as an interesting diversion—basically a picture that interacts with the viewer. But Matt Bell, the inventor, saw the possibilities, and a new form of advertising was born. The system projects 2D or 3D images onto nearly every sort of surface. Consumers can bring the images to life through physical movement. The platform incorporates the company’s proprietary infrared technology, an LCD video projector, and a display surface. It is also connected to a network that controls the content of the display. The technology runs the risk of being a passing fad, but it’s still in its infancy, and improvements could keep it relevant and attractive.

Rosum

ADDRESS 1450 Veterans Blvd., Suite 100Redwood City, CA94063

1450 Veterans Blvd., Suite 100Redwood City, CA94063

PHONE 1-650-421-4000

FOUNDED 2000

CEO Skip Speaks

EMPLOYEES 27

FUNDING $20 million+, 2 rounds

KEY INVESTORS In-Q-Tel, Charles River Ventures, Allegis Capital, Motorola, KTB Ventures, Steamboat Ventures, Microtune, Trimble Navigation

Urban areas and indoor locations challenge global positioning system (GPS)-based location applications. That’s why Rosum has developed TV-GPS, which combines commercial broadcast television signals and GPS signals. This technology is not only cool, but it could help save your life. It can be used to help first responders like police, firefighters, and homeland security experts locate callers. The company hopes to prove to the U.S. Federal Communications Commission that 911 calls made over VoIP can benefit from TV-GPS. Rosum is also going after existing markets, which include automatic vehicle location and asset recovery. With more than 50 patents issued, Rosum protects its unique technology. But not everyone knows about the limitations of GPS, so the trick will be to pick out which market segments and products to focus on first.

Scalix

ADDRESS 1400 Fashion Island Blvd., Suite 602San Mateo, CA94404

1400 Fashion Island Blvd., Suite 602San Mateo, CA94404

PHONE 1-650-931-9400

FOUNDED 2002

CEOGlenn Winokur

EMPLOYEES 55

FUNDING $19.2 million, 2 rounds

KEY INVESTORSMayfield Fund, New Enterprise Associates, Mohr Davidow Ventures

Enterprise

Linux may be making real inroads in the server market, but despite the promise of lower total cost of ownership, it has failed to gain traction in the workplace. Windows-based clients like Microsoft Outlook/Exchange and Lotus Notes/Domino continue to dominate in basic applications like collaboration and messaging. Scalix hopes to change this by eliminating much of the disruption associated with switching to an open-source system and the appreciable losses in productivity as employees learn a new client. Scalix offers web-based email, calendaring, and instant messaging platforms for Linux-based systems and boasts seamless migration through a plug-in for Outlook, so that enterprises can realize cost savings. But Scalix’ future success is still tied to Linux uptake, which—its fanatical adherents notwithstanding—has yet to reach its tipping point.

SS8 Networks

ADDRESS 91 East Tasman Dr.San Jose, CA95134

91 East Tasman Dr.San Jose, CA95134

PHONE 1-408-944-0250

FOUNDED 1999

CEODennis Haar

EMPLOYEES 200

FUNDING $95 million, 3 rounds

KEY INVESTORSW Capital Partners

The path from a legacy telecommunications system to something new and flashy like VoIP is a dangerous passage for a service provider. If things go wrong, it’s not pretty. SS8 Networks is positioning itself as a guide for the tricky journey. The company claims its technology allows service providers to keep legacy systems running while unveiling new networks such as VoIP. SS8 also has a lawful intercept product that allows service providers to comply with requests from law enforcement to listen in on phone calls. With 250 deployments in more than 70 countries, and customers such as Cingular Wireless, Covad, and MetroPCS, SS8 is off a good start. Still, the company has a risky road ahead. Competitors like IP Unity and TDsoft are also gunning for market share.

Staccato Communications

ADDRESS 5893 Oberlin Drive, Suite 108San Diego, CA92121

5893 Oberlin Drive, Suite 108San Diego, CA92121

PHONE 1-858-812-1000

1-858-812-1000

FOUNDED 2002

CEO Rick Kornfeld

EMPLOYEES 45

FUNDING $27.5 million, 2 rounds

KEY INVESTORS Charles River Ventures, Bay Partners, Allegis Capital, InterWest Partners, Intel Capital, Vision Capital

Charles River

Staccato Communications says its product spells doom for the rat’s nest of cords behind computers, printers, and other consumer electronics in the new digital home. The fabless chip company produces chips that allow computers and electronic devices, from digital cameras to televisions, to communicate wirelessly using ultra-wide band (UWB) technology. Staccato’s single-chip design and the use of a common manufacturing method makes its products attractive to device manufacturers. The company is partnering with the likes of NEC, Philips, and Fujitsu for product development and marketing. Its customers include Abocom and Coretronics. Staccato is ahead of the curve, but UWB devices won’t be available to consumers until 2006—meaning that the company’s long-term success is far from certain.

TomoTherapy

ADDRESS 1240 Deming WayMadison, WI53717-1954

1240 Deming WayMadison, WI53717-1954

PHONE 1-608-824-2800

FOUNDED 1997

CEO Frederick Robertson

EMPLOYEES 200+

FUNDING $28 million, 4 rounds

KEY INVESTORS Venture Investors, Avtech Ventures, Ascension Health Ventures, Advantage Capital, Open Prairie Ventures

TomoTherapy combines two common methods in its approach to treating cancer: radiation and intensely modulated radiotherapy (IMRT). The technology attacks tumors with numerous laser beams. The system resembles a CT scanner, with the patient lying on a bench that moves continuously through a rotating structure. The results are fewer side-effects, less exposure of healthy tissue, and better patient outcomes, says TomoTherapy CEO Frederick Robertson. And the TomoTherapy HiArt System—approved in the United States, Japan, Europe, and Canada—is bringing in profits. The biggest challenge ahead is “scaling the business to meet demand,” says Dr. Robertson, who calls his technology disruptive. The company is in the midst of building up its infrastructure and has hired approximately 50 employees in the last few months. If only other bioscience startups had that problem.

United StatesCanada

UPEK

ADDRESS 2200 Powell St., Suite 300,Emeryville, CA94608

2200 Powell St., Suite 300,Emeryville, CA94608

PHONE 1-510-420-2600

FOUNDED 2004

CEO Alan Kramer

EMPLOYEES 70

FUNDING $20 million, 1 round

KEY INVESTORS Sofinnova Ventures, Diamondhead Ventures, Earlybird Venture Capital, Greendot Capital, EDBV Management

Without strong identity protection like biometrics, companies have little protection against criminals exploiting systems and accessing proprietary information. That’s where UPEK’s innovative chip technology and sensor systems come into play. Invented in 1996 and refined over the past nine years, UPEK’s core technology is a chipset that generates a 3D record of a fingerprint. The company claims its biometric device is much tougher to spoof than thermal and optical 2D systems. This year, Frost & Sullivan expects the market for finger sensors and subsystems to double to $60 million compared to last year. With UPEK growing its revenues at 100 percent year-over-year, the company is well positioned to win in the market, provided it can execute and deliver as competitors race to the biometrics market.

UPEK’s core technology is a chipset that generates a 3D record of a fingerprint. The company claims its biometric device is much tougher to spoof than thermal and optical 2D systems.

Vonage

ADDRESS 2147 Rt. 27Edison, NJ 08817

, NJ 08817

PHONE 1-732-528-2600

FOUNDED 2001

CEO Jeffrey Citron

EMPLOYEES 1,000

FUNDING $208 million, 4 rounds

KEY INVESTORS 3i, New Enterprise Associates, Meritech Capital Partners

Enterprise

As the largest independent VoIP provider with more than 500,000 subscribers to date, Vonage has become a high-profile company, spending heavily on flashy marketing and fighting public battles over emergency services and regulatory issues with major telecoms and public utilities. Vonage CEO Jeffrey Citron laments the time spent over endless court cases, but the company is cutting a groove in the nascent industry and is allowing startups to follow in its path. Though Vonage has received more than $200 million in funding, rumors over another round of funding and a possible IPO by the end of the year are constant fodder for speculation. For now, the company is hoping its catchy brand as “The Broadband Phone Company” will secure its place as an industry leader, and detract from accusations that the company’s lack of nationwide, reliable emergency service access is its Achilles heel.

Vontu

ADDRESS One California St., Suite 1500San Francisco, CA94111

One California St., Suite 1500San Francisco, CA94111

PHONE 1-415-364-8100

FOUNDED 2002

CEO Joseph Ansanelli

EMPLOYEES 50

FUNDING $25 million, 3 rounds

KEY INVESTORS Benchmark Capital, Venrock Associates, U.S. Venture Partners, GM Capital Partners

U.S.

This is the third startup for Vontu CEO Joseph Ansanelli, who negotiated the company’s first round of funding from his couch in 2002 after breaking his back in an accident. Vontu wants to fill the biggest hole in a corporation’s security, which comes from internal leaks, not hacker penetrations. According to a recent FBI survey, 59 percent of companies have detected some internal abuse of their networks. Vontu’s extrusion-prevention software can block sensitive information from leaving the network. For companies facing stiff federal and state regulations, keeping personal, financial, and proprietary data secret has become increasingly important. Vontu faces competition from Tablus and Reconnex, startups that peddle a similar version of its solution. Perhaps the bigger threat could come from an effective digital rights management scheme, but it’s still a few years out.

Webroot Software

ADDRESS 2560 55th St.Boulder, CO80301

2560 55th St.Boulder, CO80301

PHONE 1-800-772-9383

FOUNDED 1997

CEO David Moll

EMPLOYEES 250

FUNDING $108 million, 1 round

KEY INVESTORS Technology Crossover Ventures, Accel Partners, Mayfield

Webroot Software wants people to feel secure when they surf the web. The anti-spyware company is targeting large and small enterprises, government agencies, ISPs, universities, and above all, everyday consumers. Webroot’s software works to protect personal information to put control back in the hands of users. And it fills an important need, since an estimated two out of three computers are infected with spyware today. The company has attracted partners including Citibank, AT&T, MSN, and Best Buy. But Webroot faces stiff competition from the biggest software vendor in the world, Microsoft, and the fourth-largest, Symantec—each has a history of steamrolling startups that get in their way. “We certainly recognize that we’ll be going up against the biggest, baddest boys in town,” says Webroot CEO David Moll.

Xtent

ADDRESS 125 Constitution Dr.Menlo Park, CA94025

125 Constitution Dr.Menlo Park, CA94025

PHONE 1-650-475-9400

FOUNDED 2002

CEO Greg Casciaro

EMPLOYEES 51

FUNDING $45 million, 3 rounds

KEY INVESTORS Morgenthaler Ventures, Advanced Technology Ventures, Latterell Venture Partners, Split Rock Partners, Biosensors International

Split

Xtent offers a one-stop shop for cardiologists who treat multiple coronary blockages. Eliminating the need to reenter the heart several times, Xtent’s technology enables multiple drug-delivering stents, customizable in length, to be implanted with one catheter. It has the potential to disrupt the status quo, with the prospect of replacing coronary bypass surgery. “We’ve got most of the ‘must-haves’ in place,” says Xtent CEO Greg Casciaro. Design, pre-clinical verification, a proven drug, and coating are all checked off the list, he adds. But Xtent has yet to pass through the rigors of regulatory approval, which are especially strict for drug-device combos. Market adoption is the challenge beyond that. Jumping through those hoops could be worth it, though—analysts predict the drug-eluting stent (DES) market will grow beyond $6 billion by 2008.

Zilliant

ADDRESS 3815 South Capital of Texas Hwy., Suite 300Austin, TX78704

300Austin, TX78704

PHONE 1-512-531-8500

FOUNDED January 1999

CEO Greg Peters

EMPLOYEES 80

FUNDING$45 million, 1 round

KEY INVESTORS JP Morgan Partners, Austin Ventures, Cardinal Venture Capital, Trellis Partners

Here’s a question that’s bothered anyone who’s ever taken Economics 101: What price, exactly, can the market bear? Sure, if you’re selling cigarettes the market will take a lot more than when you’re selling bottled water. So what about everything else? Companies like Zilliant strive to provide some answers. Zilliant’s software promises to help sellers better manage how they price their products to maximize sales, without killing profits. To be sure, competitors abound. DemandTec, ProfitLogic, Manugistics, Acorn Systems, Rapt, and Metreo all offer so-called “price optimization” or “demand management” software. Zilliant, however, offers a few interesting twists. One of them is “price testing,” which allows Zilliant’s software to analyze responses to price and promotion offers to fine-tune its pricing models—a key reality check when you’re managing something as sensitive as pricing.