Skytap Receives $10 Million in Funding

Skytap, a cloud provider that offers virtual data centers for application testing and deployment, this week said it has received a $10 million infusion.

The Series C round of funding came from Open View Venture Partners, putting the total venture investment in Skytap at $23.5 million. Skytap's existing investors include Madrona Venture Group, Ignition Partners, Bezos Expeditions and Washington Research Foundation.

I spoke with Skytap CEO Scott Roza this week who was naturally quite excited about the latest round of funding. "They don’t do B seed rounds or A rounds, they really are looking for companies that have built a product and they're beyond the technology risk stage of growth," Roza said.

While Skytap hasn't disclosed its revenues, Roza said they have doubled in the past year, as has the number of paying customers, which is up to 150. Among them are Ellie Mae, Nuance Communications, Apptio, Hargis Engineers, Sefas Innovation and Binary Tree.

Roza's goal is to double the number of customers over the next year. To achieve that, he said 70 percent of its new funding will be applied to expanding sales and marketing, while 30 percent will go toward adding new features to its cloud automation software, its key asset.

Skytap doesn't run its own datacenters; rather it has partnered with Savvis to offer virtual datacenters to customers through VMware-based virtual machines. Skytap has also licensed its software to Computer Sciences Corp., which offers its own service to large enterprise and government agencies. Roza said he is looking to do another such licensing deal this year.

As for its own service, Skytap started out in 2007 as a cloud-based service for developers and testers who required on-demand infrastructure to test their apps. Last year, Skytap added to its network automation capabilities to allow customers to migrate their business apps to the cloud.

The release supports full clustering and failover. Customers can create their own servers or clusters, failover configurations and shared services to enable applications to run in the cloud. Skytap accommodates both Microsoft .NET applications and open source LAMP-stack apps.

Skytap also lets customers create virtual private clouds by connecting the company's multi-network virtual datacenter configurations with existing premises-based enterprise networks.

Asked if an IPO is in the works, Roza said that's a few years out.

Posted by Jeffrey Schwartz on January 06, 2011