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Networking startup Blackwave Inc. has wrapped up a $16 million Series B round that will finance the rollout of its Internet video storage and delivery systems in the first quarter of 2008. The company, which recently changed its name from Acinion, tapped new investor Sigma Partners of Boston to lead the round. Also participating were the returning Boston-based Globespan Capital Partners and IDG Ventures Boston. Blackwave has raised $21 million since its founding two years ago. Globespan and IDG gave the Acton, Mass., company $5 million in first round funding in the third quarter of 2006. Blackwave received multiple term sheets while raising the Series B round, which came at an increase in valuation to that of the Series A, said Robert Rizika, Blackwave's president and chief executive officer. He expects the current funds to last the company until the end of 2009. By then, Rizika hopes revenues will be strong enough to have the company break even. "It'd be great if [this round] takes us the whole way," he said. The Blackwave family of products are designed to increase the effectiveness of the infrastructure equipment used to serve and store Internet video. "We deliver 10 times the streams people can currently get out a rack," Rizika said. "A normal rack can handle 2,000 simultaneous video streams. We can get 20,000 streams out of that same-size rack, so instead of buying 10 racks you can buy one rack." This type of cost saving for customers proved a draw for the company's venture capitalists. "Internet content providers are looking for cost-effective ways to increase performance and reduce costs in storing and delivering ever greater amounts of video," said Jonathan Seelig, managing director, Globespan Capital Partners, in a statement. "In our view, many content providers will gravitate to Blackwave's solution because of its clear benefits for capital and operational cost reduction and improved quality-of-service delivery to end-viewers." Rizika said Blackwave will target media companies that want to build their own infrastructure for video delivery, as well as content producers that need a media storage and delivery solution for content delivery networks such as Limelight Networks Inc. or Akamai Technologies Inc. "We're going to launch in the first quarter of next year and will announce our first customers at the beginning of Q2," Rizika said. "We have our first revenue customer now, but we're not announcing who they are. We're waiting to build up a group of them and then announce that." Blackwave will use the round's proceeds "to build the engineering organization to complete the product," Rizika said. "We also going to hire a sales team to go to market." With about 40 current employees, Blackwave expects to double its head count in the next six months and get its technology available in the first quarter of 2008.  Deal Video
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