XAware has received $2.1 million in a Series A round financing. The infusion was led by ITU Ventures with a $750,000 investment. Gefinor Ventures, XAware’s Chief Executive Officer Bill Miller and former Sun Microsystems executive Janpieter Scheerder also participated in the round.
The Colorado Springs-based XML information exchange and data integration company plans to expand its sales and marketing efforts with the fresh capital. “We’re going to apply this money to doubling the company. A lot of the biggest companies are spending a lot of money on this. We make it easy because we also integrate,” says Miller, who notes that the customers are mainly in the financial services and government space. “These are two areas where it is very important to connect the dots.”
XAware touts 14 employees. Miller expects that number to be 30 in six months to nine months. “By then we will have a good handle on if our strategy is working. We’ll take the market’s temperature, and we will see if we want to expand at that point. We will also be able to get the company to cash-flow positive,” says Miller.
XAware was started by two engineers who worked at WorldCom. Three years ago they decided there had to be a better way to integrate data. “They left WorldCom and did consulting on the side to keep the lights on and then they wrote this software, which is incredibly productive and efficient,” says Miller. The software was rolled out late last year and the XAware already has about 12 customers.
XAware took the money to be able to expand quicker. While Miller wouldn’t disclose the company’s post-money valuation, he did say he was satisfied with it. “Valuations are not what they were, now you actually have to prove something to get a decent one. This wasn’t bad but it wasn’t the $25 million I got when I was CEO of Storage Networks and it didn’t have any products,” says Miller.
The market is clearly different these days. In fact, while Storage Network had an IPO, Miller realizes that other liquidity events may be just as well. “You just have to concentrate on building. I am a big believer in providing the right foundation and letting things work themselves out,” says Miller.
Contact Danielle Fugazy