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NSI Looks To Replicate with $15M

If one server fails, another one takes over and saves your work. It’s that simple with NSI Software. Perhaps that is what intrigued ABS Capital Partners to lead a $15 million Series B deal into the Hoboken, N.J.-based company. Or maybe ABS Capital just felt comfortable investing in a company that has been in the data replication technologies and services business for over 11 years.

Whatever the case may be, the deal is done and Laura Witt, a general partner with ABS Capital and NSI’s newest board member is happy about it. “They are leaders in the data replication market and enterprises are increasingly moving to this platform,” she says. “NSI has an ideal opportunity to capitalize on that trend.”

Self-funded from 1991 to 1996, NSI turned to venture capital to speed up its growth into new markets. After an initial angel round, the company took in $36 million in March 2000. J. & W. Seligman & Co. led that round and also participated in NSI’s most recent round.

“We raised this money for specific goals and we feel comfortable with it. There are a number of opportunities out there that we are always evaluating,” says Donald Beeler, chairman and CEO of NSI Software. He would not say whether this would be the company’s last round of private equity. “Things may change depending on the opportunities that come available.”

One of the company’s specific goals is to reach profitability in the near future. “We don’t release numbers, but let’s put it this way: ABS Capital is a late-stage investor and they wouldn’t have been interested in us if we weren’t close to profitability.”

Beeler classified the round as a “very up round. Based on the economic situation, this turned out to be a very good round for us,” he says.

Beeler went on to say that NSI has 40 customers worldwide that includes Dell, EMC, Hewlett-Packard, IBM and Microsoft . In fact, NSI’s flagship product, Double-Take, is the only replication product to achieve certification on Microsoft Windows 2000 Server, Advanced Server Datacenter Server. The system combines continual real-time backup and automatic fail capabilities to virtually eliminate downtime and data loss.

Going forward, although ABS invests in later stage, Witt isn’t looking for any exits just yet. “We don’t any conclusions yet. We like to believe the company has the opportunity to be an attractive M&A target or public company. We like to think everything could play out,” says Witt. “Right now the company’s only challenge is to decide what opportunities to pursue. It’s well-positioned to execute ahead of the competitive trend . We’re are just looking forward to the company staying on a high growth rate and driving profitability.”