Spam Control Vendor Sendio Gets $3M Venture Funding

Sendio makes an email threat protection appliance, with special emphasis on spam control. On February 9, 2009, Sendio announced it had raised new equity funding of $3M.

Products and Competitors:

  • Appliance that protects against email-based threats, including spam, viruses, and phishing.
  • Challenge/response is a key element of Sendio's technology.
  • Product launched in January 2004.
  • Main competitors are Barracuda, Cisco (through IronPort acquisition), and Google (through Postini acquisition).
  • Spam control seen by Ferris Research as a mature and highly competitive market.

Trading Performance:

  • Sendio has not yet attained significant revenues or breakeven.

Funding History and Transaction Summary:

  • Prior venture funding of $6M.
  • Current Series B financing of $3M.
  • As revenues have not yet taken off, the business was valued on a Series A basis.
  • Athenian Venture Partners is lead investor, accompanied by prior investors Momentum Venture Management, Shepherd Ventures, and Vicente Capital.

Investor Interest and Motivations:

  • Mainstream VCs generally declined the opportunity. They are largely reluctant to invest at present, other than in current portfolio companies or early stage.
  • The new investor, Athenian, likes the use of challenge/response, which it sees as a potentially disruptive spam control technique.
  • Existing investors are providing continuing support for the company during difficult market conditions.

CEO Tal Golan's advice to other fund-seekers in today's climate is:

  • VC funding market is tough at present, but may pick up from Q309.
  • Strategic partners--such as Cisco, IBM, Intel, and Microsoft--are a good way to seek capital, plus they may give stockholders an exit option later on.
  • It's good to use your personal network to find sources of funding.
  • Investors network with each other. So, for example, investors you know personally can introduce you to other prospective investors.

... David Ferris

One Comment

  1. Posted April 24, 2009 at 2:48 AM | Permalink

    Thank you for the post.

    We appreciate the recognition that filtering is not the “only game in town.” While it is true that our revenues are not currently comparable to the likes of Cisco or Google, we are very encouraged by our continued success and growth in terms of sales, customer satisfaction, and the fact that we are regularly replacing our much larger filtering cousins in enterprises worldwide.

    I look forward to participating as a contributor on your 29 April 2009 webinar.

  2. Posted April 24, 2009 at 8:55 AM | Permalink

    We look forward to the webcast as well Tal–Many thanks for participating.


  3. Ken Simpson
    Posted April 24, 2009 at 5:05 PM | Permalink

    Are you kidding me? Challenge response is dead. But, I suppose, long live challenge response as a result of this funding.

  4. Posted April 25, 2009 at 4:03 PM | Permalink

    Thanks Ken.

    We agree with you. Challenge/response has a number of well-understood issues around false positives and backscatter. There are several vendors who have de-emphasized the use of the technique or even eliminated it completely. I’m removing “Challenge/response is a key element of the protection infrastructure.” It was an editorial (ie, my!) oversight that this was included.–david

  5. Posted April 29, 2009 at 3:35 PM | Permalink

    I just realized what I originally intended, and have inserted the following text: “Challenge/response is a key element of Sendio’s technology”

Post a comment

You must be logged in to post a comment. To comment, first join our community.