Pure Networks Brings Home $7M

Think of how much more convenient everything would be if you had a home network. Digital content could flow among your family and friends’ electronic devices. All you have to do is install the network, right?

“But have you ever tried to set up a home network?” asks David Ladd, managing director with Mayfield. “I’m the IT department for the entire family. I know it’s a challenge.”

Frustration with home networking even led Ladd outside his normal investment sweet spot. So when a Seattle company approached the firm with software products promising to make home network installation and management easier, Mayfield found itself leading Pure Networks’ $7 million Series A round of funding.

“I don’t normally do consumer deals,” Ladd says. “But I felt the pain that the consumers feels in setting up and maintaining home networks.”

The round included previous investor Ignition Partners and two outside individual investors. Pure Networks was founded in 2002 and has raised $9 million to date. It raised a $2 million seed round in early 2003 from Ignition and unnamed individuals.

David Ladd has joined Pure Networks’ board of directors. Both the company and Mayfield declined to specify the post-money valuation of the round, which was an up round with a post-money valuation under $20 million.

The company will use the funding to develop its next product line and improve its sales and marketing abilities. So far, Pure Networks has one major distributor for its software.

Company president and CEO Timothy Dowling declined to name the distributor, whom he describes as “an ISP and they ship out a lot of client software,” but he said the company would be making an announcement within the next six weeks.

The company cites research by Parks Associates that puts the current number of homes with data networks at more than 13 million and projects households with data networks to top 30 million by the end of 2008. Ladd says that helping to improve home networking capabilities has positive implications for other industries, as families will be less likely to return equipment to retailers, frustrate ISPs with support calls caused by network glitches and allow consumer electronic devices to be used on the Internet more easily.

Under its current plan Pure Networks expects to be profitable by the end of this year. It may raise a Series B in about a year, according to Ladd, if a large enough expansion opportunity presents itself.