Business: Arbor Networks Inc. protects networks from security threats, such as worms, with a denial of service (DOS) detector that pinpoints potential attacks.
Headquarters: Lexington, Mass.
Founded: August 2000
VC raised to date: $33M
Capital raised one year ago: $22M
Investors: Thomas Weisel Venture Partners, Comcast Interactive Venture Capital, SAIC Venture Capital Corp., Ironside Ventures, EDF Ventures, Battery Ventures and Cisco Systems Inc.
Plans one year ago: Armed with $22 million in capital from its series B round of funding last year, Arbor Networks was prepared to compete against an influx of DOS detector companies.
To combat the competition, the company closed out its Series B round, hired Thomas Arthur as its new CEO, and went about signing new customers.
The company closed about $5 million in contracts and was in talks with four companies to establish its DOS system in North America. The company was prepared and waiting for an oncoming shakeout in its industry.
Status: Arbor’s strategy for the shakeout appears to have been successful. The $22 million that it collected from last year’s round of funding is fueling the company’s push into profitability. Arthur remains as CEO, and the company has landed a number of customers, including Cox Communications, Rackspace Managed Hosting and subsidiaries of the US Department of Defense, to name a few.
The company expanded its customer base in February to include Europe, and further expanded in June to cover Asia.
Arbor has also just completed the acquisition of Asta Networks, bringing its intellectual property to a total of 16 patents. With the success of its Peakflow platform, the company expects that it will reach profitability (with a 100% increase in revenue) by the end of the year.
There are currently five service providers in South Korea and Taiwan who are testing Arbor’s Peakflow platform now.
Although the company hasn’t expanded beyond having 67 employees, Arbor has placed four employees in Europe and two in Asia for sales and support.
An addition to Arbor’s sales line is a new component of the Peakflow platform known as Peakflow X. The product is geared toward Fortune 500 businesses (as opposed to service providers), and is designed to monitor their internal traffic.
The monitoring system would allow Peakflow X to “detect, trace, and mitigate” any worms or misuses that occur within the internal system.
The product is currently on limited release to six potential customers, including Fortune 500 companies, government deployments, and universities.
Arbor pinned its first paying customers for Peakflow X this quarter.
As for the future, because the company is focused on reaching cash flow positive it doesn’t anticipate another round of funding. Even though it anticipates reaching profitability by the end of the year, the company didn’t divulged specific plans for an exit strategy.