$8 Million More of 'Under the Mattress' Money for CloudSwitch

Here's an item that'll spark some jealousy in any entrepreneur who finds it tough raising venture capital in the current climate: CloudSwitch has raised a second round of $8 million in venture capital funding, led by new investor Commonwealth Capital Ventures. This follows a first round of $7.4 million that was first reported here on Innovation Economy in January.

I spoke to founder and VP/products Ellen Rubin late on Friday, as the company was moving into new office space in Burlington. (The funding news was under embargo until this morning.) The company now has 18 people, including new CEO John McEleney (formerly CEO at SolidWorks), co-founder and CTO John Considine (formerly of Sun and Pirus), chief architect Fred Oliveira (who formerly worked on EMC's Atmos cloud offering), VP of product management George Moberly (ex of EMC and BladeLogic), and VP of engineering Sean Henry (formerly of RSA.)

"We weren't really actively looking for money," Rubin said. "But there was a fair amount of pre-emptive interest at attractive valuations. Having John McEleney join was the catalyst. He's pretty well-regarded, and had a phenomenal track record at SolidWorks. He knew the Atlas and Matrix guys [who led CloudSwitch's first round], and has known the guys at Commonwealth for a long time." Eliot Katzman is the partner at Commonwealth who will join CloudSwitch's board; Matrix and Atlas participated in the new round. CloudSwitch's objective is to help make the low costs and flexibility of cloud computing services safe for enterprise use.

"This is one of those funny situations," Rubin told me. "We'd just raised the A, and we weren't going to be looking for more money until well into 2010. This is just money to have, so we can focus on getting the product out the door. You just put it in the bank and let it sit there."

Nice situation to be in...

Three CEO Moves: Viximo, CloudSwitch, Paragon Lake

I don't usually track executive comings and goings here, but three interesting ones have happened recently (not all officially announced yet):

1. Rob Frasca has been replaced as CEO at virtual goods company Viximo by Dayna Grayson from North Bridge, who will serve as acting CEO. North Bridge is one of the company's investors.

2. Long-time SolidWorks CEO John McEleney is taking over as CEO at stealthy start-up CloudSwitch from founder Ellen Rubin, who is staying on in a key executive role.

3. At custom jewelry site Paragon Lake, they're bringing in former BrassRing CEO Deb Besemer as CEO, and moving founder Matt Lauzon over to COO.

Here's a recent post from Lauzon on "Hiring the Right CEO."

Clouds Coalesce in Boston

Today's Globe column is about the cloud computing scene in Boston, including CloudSwitch, and a new investment General Catalyst is making in Good Data.

An opening quote from EMC exec Chuck Hollis:

"Cloud computing will change how we do IT, end-to-end, over the next five years," says Chuck Hollis, vice president of global marketing at EMC, the Hopkinton-based storage firm. "It's like in the early 20th century, if you were a manufacturer, you had to build your own power plant. But eventually, you had the option to buy your electricity from the grid, and let someone else worry about how it was generated. Corporate data centers are going to have that kind of choice, too."

General Catalyst Invests in the Cloud

The ink is almost dry on General Catalyst's latest investment: what they're calling a "seed preferred" round of several million dollars for Good Data, a SaaS/cloud computing-oriented company focused on business intelligence and analytics. Larry Bohn is the GC partner on the deal, and angel investor John Landry is also putting in some dough.

Good Data founder and CEO Roman Stanek earlier started NetBeans (acquired by Sun) and Systinet (acquired by Mercury Interactive and HP.) The company's engineering will take place in Prague, but the business HQ will be in San Francisco.

Around the time that Good collected $2 million last year (in an earlier seed round), the company was described as being based in Cambridge (they had space at the Cambridge Innovation Center), but alas... Good Data marketing veep Sam Boonin told me that "our business model is primarily going to be working together with other SaaS companies, so we wanted to be in the Bay area." (Systinet, an earlier Stanek start-up, had a presence in Cambridge.)

Good Data was founded in mid-2007, but they acquired another Czech company that provided the core analytics engine they're using. They're building atop Amazon's EC2 cloud infrastructure. "We've got about 500 people in our [free] beta program right now," says Boonin. A commercial version should be available around May.

With regard to investing related to cloud computing, Bohn said from Prague, "You try to be early, bet on the right people, and try to get a head start." He said he'd been seeing lots of potential investments in the cloud space, but most were apps that "may not be defensible enough."

This is the second cloud-connected deal I've seen in 2009 from Boston venture capitalists. The first was CloudSwitch, which involved Atlas Venture and Matrix Partners.

$7.4 million for CloudSwitch, Which Aims to Make Cloud Computing Safe for the Enterprise

Better late than never?

Two Boston-area venture capital firms just put the finishing touches on a $7.4 million A round for Bedford, Mass.-based CloudSwitch this week. It's the first investment in a pure-play cloud computing start-up here in Massachusetts that I'm aware of. Matrix Partners incubated CloudSwitch in its offices for much of 2008, and Atlas Venture joined in the funding round.

The company was founded by Ellen Rubin (CEO) and John Considine (CTO), both of whom had earlier worked at other Matrix portfolio companies. Rubin had headed up marketing for Netezza, leaving last February following the company's 2007 IPO; Considine had worked at Pirus Systems, acquired by Sun back in 2002.

Rubin isn't saying much about what they're up to, other than that they're developing software to help enterprises manage cloud computing services. "I don't want to say much for competitive reasons, but we're working with partners and customers now, and building out our offering," she told me today. She said they'll be ready to divulge more in the spring. The company has about ten employees, and office space in Bedford.

Rubin says they're hiring, but there's no listing of jobs on the company's one-page Web site. Rubin says they're working with recruiters, and talking with folks who're part of the founding team's network.

"I've been paying attention to cloud ideas for about 18 months," says David Skok of Matrix. "John [Considine] is a storage guy, but I kept saying, 'Go look at what Amazon is doing. It's totally amazing.' He came back with a cloud idea, and I introduced him to Ellen. Then we spent a lot of time working with them to shape a defensible idea."

Axel Bichara is the Atlas Venture partner who'll take a seat on the board. Also on the board at CloudSwitch are Jit Saxena, CEO of Netezza, and Andy Palmer, a serial entrepreneur who has been involved with Bowstreet, Vertica, Infinity Pharmaceuticals, and Byledge.

The only previous mention of the company I've been able to find is this quick name-check from GigaOm.