Content delivery network Edgecast Networks has raised $10 million in a Series C financing round that was led by Menlo Ventures and included existing investor Steamboat Ventures. In addition to the funding, Menlo managing director Pravin Vazirani will join the Edgecast board.
The new funding comes just as Edgecast reached profitability, and is expected to be used to advance new product enhancements and an expansion of the CDN’s network. In a phone conversation with NewTeeVee, Edgecast president James Segil said that the company was EBITDA-positive for 2009 and posted a net profit in the fourth quarter of last year. So why raise another round?
Segil said the funds will be used to expand its workforce by 50 percent, from around 50 employees today to about 75 by the end of the year, with plans to add new products and features to the CDN’s portfolio. That includes adding dynamic site acceleration and application acceleration products to better compete with industry leaders Akamai and Limelight, as well as enhancing its network with more POPs in markets where Edgecast doesn’t yet have a presence.
According to Segil, Edgecast hopes to add more of a local presence in India and Latin America, which are just two of the markets that it believes are underserved by the company. As part of its network expansion, Edgecast recently rolled out POPs in Singapore and Paris to enhance its business in Europe and Asia-Pacific. Edgecast also has peering agreements with 850 IP transit and network providers, compared to about 900 network providers that Limelight peers with.
While Edgecast competes against Akamai and Limelight in the media and enterprise segments of the CDN market, a good portion of its business doesn’t come through direct sales, but through channel partnerships with ISPs, hosting providers and other resellers. Deutsche Telekom and Global Crossing are just two major ISPs that resell Edgecast’s CDN services, but Segil says that the CDN has reseller deals with more than 60 channel partners and more than 1,400 customers in total.
To date, Edgecast has raised a total of $20 million, including a $6 million funding round in late 2007 led by Steamboat, Disney’s financing arm.
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