CoreStreet closed $8.5 million in a Series B funding last week, bringing its total venture capital raised to $14 million. Previous investor POD Holding co-led the round with new investor Updata Venture Partners.
The round was an undisclosed up round that saw the two venture firms put in all but about $1 million. Individual investors made up the difference. Updata Managing Partner John Burton will join the board. Updata General Partner Tim Meyers will serve as a board advisor.
The developer of security software raised a $4 million Series A last spring after taking in $1.5 million from management, friends and family. POD was the only institutional investor in the company’s Series A round.
CoreStreet President Phil Libin says that most of the company’s angel investors returned for the Series B round, and VC firms that had been wary of investing during the Series A put in term sheets for the Series B.
In all, CoreStreet took six months to put together the round.
The Cambridge, Mass.-based company now employs about 35 people at its headquarters and in its sales offices in London and Washington, D.C.
Libin expects that the company’s ranks will swell to more than 60 over the next 12 months. He says that CoreStreet will spend the majority of the Series B funding on sales and marketing, with a special effort made to expand into European and Asian markets. CoreStreet plans to open sales offices in Europe and Asia, but has yet to determine exactly where.
While not ruling out another round, Libin doesn’t expect the company to raise a Series C since he hopes to reach profitability by 2005.
CoreStreet was originally two small separate startups that merged in August 2002. Both startups were based on technology developed by Professor Silvio Micali at the Massachusetts Institute of Technology.