Who says the email security market is overfunded? Certainly not Sequoia Capital, which led a whopping US$40 million (NZ$57 million) investment in messaging appliance maker Barracuda Networks in a deal that was announced on Monday.
The investment, in which Francisco Partners also participated, marks the first time the technology company has taken cash from an outside source. Four-year-old Barracuda makes security appliances that protect corporate email, web, and instant messaging traffic from spam, viruses, and spyware, according to the company.
Such a sizeable investment raises eyebrows these days, especially considering many investors view the messaging security market to be beyond capacity, following the mad rush of start-ups to capitalise on the looming spam threat.
Barracuda has found a niche for itself in the small-and-midsize business (SMB) market, although in November it went after the likes of IronPort with an enterprise version of its antispam appliance. IronPort fired back in December with an SMB version of its email security product.
Barracuda claims 30,000 customers, including Barnes & Noble and the US Department of the Treasury.