Funding rounds show DotCom winter may be ending
Deseret News David L. Politis www.deseret.com deseret-news
The soft sound of ka-ching that you heard twice in the past couple of weeks was further evidence that the general technology industry and Utah's high-tech sector are doing better.
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Deseret News
The soft sound of ka-ching that you heard twice in the past couple of weeks was further evidence that the general technology industry and Utah's high-tech sector are doing better.

Specifically, two Salt Lake City-based tech companies announced recently that they had closed fairly sizeable funding rounds (sizeable by Utah standards that is).

Forum Systems (www.forumsys.com) announced in late September it had landed a $17.5 million Series B round of funding.

Funding for this round came from three venture capitalists, GMG Partners, CMS Companies, and Navigator Fund, with GMG leading the round. (FYI: GMG has an office in Salt Lake City, with headquarters in New York City.)

All told, Forum has raised close to $20 million (by my calculations) and is one of the brightest stars in Utah's tech constellation, having won awards for its initial product offering from industry publications Network Magazine and Network Computing.

The Forum Sentry is what is known as a secure XML gateway, meaning that it's a combination hardware/software solution that attaches to a Web server to prevent hackers from breaking into corporate data to steal sensitive XML data, such as credit card or medical records, or compromise general corporate security.

For the uninitiated, XML stands for eXtensible Markup Language, and in simplest terms, it's the software language behind most of the advancements found on corporate Web sites during the past several years.

Unfortunately, the structure of XML makes it quite easy for skilled evildoers to know exactly where to look within a database for specific types of data - and such Web data is typically not stored on a server in an encrypted fashion.

So the geniuses at Forum identified this as a significant problem and figured out how to fix it; hence, the industry awards and the latest round of funding.

The other Utah firm to land a significant chunk of change lately was Attensity, also of Salt Lake City, which closed a $12 million Series B round in early October.

The company's latest financing was led by Palomar Ventures, with additional investors including In-Q-Tel, the strategic investment arm of the Central Intelligence Agency, Jefferson Partners, The Entrepreneurs' Fund, Highway 12 Ventures, Triangle Venture Capital Group and Village Ventures.

This is the second time In-Q-Tel has invested in Attensity, and to my knowledge, Attensity is the only Utah firm to receive monies from the CIA.

The CIA's interest in Attensity can be tied to the company's technology, which is capable of assimilating up to 100 pages per second of all types of free-form information (such as news articles, customer complaint letters, and service technician reports, to name a few) and then categorizing such information into searchable data fields.

The idea is to help organizations to quickly understand what they know, even if they don't know they know it or even that they have the critical data on hand.

Hypothetically, if a tire or car company were an Attensity customer, and if tire repair centers began to see signs of unusual and potentially dangerous wear on a brand of tire found on certain models of cars, such information might be initially found in the form of notes made by service bay technicians.

Unfortunately, it typically takes a significant amount of time and information before a car or tire company would even be aware that there was a potential problem and begin to investigate what was going on and whether action needed to be taken.

Instead, the Attensity system allows organizations to get the jump on such new information faster than ever before which allows them to respond earlier than previously possible.

Attensity's current customers include governmental agencies (including the CIA) and heavy equipment manufacturers.

With the closing of this month's financing, Attensity has raised more than $18 million.

My recent travels have also put me in touch with half a dozen or so Utah start-ups that have each raised or begun raising investment dollars, some of which have already broken through the $1 million funding level for their tech companies.

So even though $29.5 million may not seem like a lot of VC money on the West or East Coasts, it's certainly not an insignificant sum here in Utah.

It's also another sign that the DotCom winter is over.

David Politis leads Politis Communications, a public relations, investor relations and marketing communications agency specializing in the high-tech and life science markets.