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Summary:

Limelight, the CDN darling for hot content startups, announced a monster round of $130 million in funding from Goldman Sachs Capital Partners, which we heard was in the works earlier this month. Limelight said it will spend the money on building out it’s infrastructure. The Tempe, […]

Limelight, the CDN darling for hot content startups, announced a monster round of $130 million in funding from Goldman Sachs Capital Partners, which we heard was in the works earlier this month. Limelight said it will spend the money on building out it’s infrastructure. The Tempe, Arizona-based company has been hit by a patent infringement lawsuit from old rival Akamai.

Limelight has been on a tear recently, signing up key customers like YouTube, much to the dismay of Akamai, and reported second quarter revenues of $14 million, up 40% from the first quarter of 2006, and over 200% from the second quarter in 2005.

Limelight’s massive fundraising doesn’t come as a suprise, and as Limelight grows rapidly, it needs significant cash to continue moving at that pace. With investors and venture firms debating over the business models for startups running video content over the web, both Akamai and Limelight have been the infrastructure companies that are already seeing the benefits.

OM adds: You read the press release, and you realize that only one investor name is announced – Goldman Sachs, which has invested about $100 million. Who is kicking in the rest $30 million?

Moreover, there are no details on how the money is actually going to be used. Is Goldman buying out some of the management share? None of the posts on the web are reflecting the fact that There is a massive lawsuit against the company by Akamai, which is known to be pretty aggressive when it comes to defending its IP.

As many of you know I have been on the trail of this story for a long time, and as a result have picked up additional details. For instance some of the big Sandhill Road firms looked at this deal and walked away. Names that I heard included Redpoint and Accel. More details on this deal to follow!

By Katie Fehrenbacher

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  1. “None of the posts on the web are reflecting the fact that there is a massive lawsuit:..read other posts more closely, Om.

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  2. updated to reflect that rafat. actually had missed your post totally :-)

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