Nokeena Networks Inc., a startup that is developing technology to better distribute and store online video, is the latest company to benefit from the incubation approach taken by Sumant Mandal, a managing director of early-stage venture capital firm Clearstone Venture Partners.
Mandal tells Tech Confidential that Clearstone, along with Trinity Ventures, is leading an $8.7 million Series A round in Nokeena, which has been in stealth mode until now. Mandal is taking a seat on Nokeena's board, as is Trinity's Fred Wang. Angel investors in the company include B.V. Jagadeesh, the CEO of 3Leaf Systems (he also co-founded Exodus Communications and is the former CEO of NetScaler Inc.); Raj Singh, managing director of Redwood Venture Partners; and Rajeev Motwani, a Stanford University computer science professor who was an early backer of Google Inc.
Incubation is at the heart of Clearstone, which began life in 1997 as Idealab Capital Partners, the venture capital arm of the infamous Idealab Inc. incubator founded by Bill Gross. The firm is known for backing PayPal Inc., which eBay Inc. bought for $1.4 billion in 2002, and NetZero, now owned by United Online Inc. [UNTD]. Today, under the Clearstone name, the firm is on its third fund and has offices in Santa Monica, Calif., Menlo Park, Calif. and Mumbai, India.
Over the years, Clearstone's association with Idealab has lessened, but Mandal, 39 (pictured), who joined the firm in 2000, is one of the partners who continues the tradition of incubation, or "co-creation," as he prefers to call it.
Mandal has used the technique to develop half a dozen startups, including Rubicon Project, which helps Web sites optimize unsold advertising space and has raised $21 million from Clearstone and other VC firms, and Mimosa Systems Inc., which makes archiving software for large companies and which has raised $51.5 million.
Nokeena grew out of conversations about the inefficiencies of delivering high-quality video online with Prabakar Sundarrajan, who co-founded Mimosa. Sundarrajan also served as an adviser on another Clearstone startup, DiVitas Networks, which makes handsets that tie together cellular and wide-area networks and has raised $23 million.
"We got to brainstorming on the next big problem to be solved," recalls Sundarrajan. "The light bulb went off on the oncoming tsnuami of high-quality Web video. That was the genesis of Nokeena Networks."
Sundarrajan, who co-founded the company with another serial entrepreneur CEO Rajan Raghavan and serves as chief strategy officer, has an impressive track record. He was the chief technology officer of NetScaler (acquired by Citrix Systems Inc. [CTSX] for $325 million in 2005) and before that a senior vice president at Exodus Communications (the high-flying Internet service provider that at its peak had a market valuation of $30 billion before going bankrupt in the dot-com crash in 2001).
"My experience with both Exodus Communications and NetScaler were central to the conversation Sumant and I had on Web video delivery," recalls Sundarrajan. "Sumant recognized the huge opportunity and indicated that the time was ripe to be bold and incubate a venture focused on solving the challenge of large scale delivery of high quality Web video."
Enter Nokeena, which is developing high-speed video processing and network optimization technology that eliminates video stops and starts by monitoring congestion on the network and adjusting video transmission accordingly. Sundarrajan says the company will launch a commercial product sometime next year, targeting large-scale content delivery networks, video content aggregators, original video providers and media companies as customers. -- Mary Kathleen Flynn
For the full story see TheDeal.com
For more on Rubicon Project see Jan. 30 post from Tech Confidential
For more on Mimosa Systems see May 19 post from Tech Confidential
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