BlueStripe Software has attracted $8 million in venture capital financing, money that will pay to double the young technology company's work force.
The Morrisville company, founded in late 2007, has 22 employees. Its leaders are hiring sales and marketing workers, as well as other staff, and plan to expand to about 45 employees by the end of 2009.
The company previously raised $5 million in funding and had enough cash left to last the rest of this year, but was approached by several investment firms, said CEO and co-founder Chris Neal.
"When a deal comes along and the terms are very good, there's no reason not to lock it up," he added.
The money makes BlueStripe a rarity during the recession -- venture capital financing has mostly dried up, hurting many of the Triangle's small tech and biotechnology firms that rely on such funding for growth.
BlueStripe sells software to corporate clients that are trying to reduce costs by consolidating the number of computer servers used to process vast amounts of data. The company's products help make sure applications such as billing software don't hit snags running on fewer servers.
The trend is known as virtualization, which refers to using the Internet to handle software applications on an as-needed basis, rather than running a constant supply of computer servers. The shift saves money on technology and energy costs.
BlueStripe was founded by two graduates of Duke University and two from UNC-Chapel Hill. BlueStripe's name and a two-toned logo come from "banding together" the two shades of blue that represent the Blue Devils and Tar Heels, said Neal, a UNC alumnus.
The four founders previously worked together at Wily Technology, a Silicon Valley tech company that was bought for $390 million on 2006 by CA Inc., a publicly traded company based in New York.
The management's track record is one factor that makes BlueStripe an attractive investment, said Noel Fenton, a general partner with Trinity Ventures. The Menlo Park, Calif., venture firm first invested in BlueStripe in 2007.
"It's hard to find something we don't like about this company," said Fenton, who is on BlueStripe's board. "It's the team, it's the product, it's the market. We think it has a lot of room to grow."
The latest round of financing also included money from Valhalla Partners of Vienna, Va. General partner Gene Riechers has joined BlueStripe's board.
"They are building the products that are needed in a new era of computing," Riechers said. "I've spent two years looking for the right company in this category to invest in."
Neal declined to comment on financial results at BlueStripe, which doesn't have to report such data as a privately-owned company. But he said that the company continues to add customers and sales are increasing "well ahead of what we anticipated."
The economic downturn, which is spurring many corporations to reduce technical spending, is accelerating the shift toward virtualization of computer servers because of the cost savings.
Another recessionary bright spot: It's easier for BlueStripe to find talented workers.
"That's the benefit of a company that's expanding when everyone else contracts," Neal said. "The downturn is putting more people on the market."
