Who says the e-mail security market is overfunded? Certainly not Sequoia Capital, which led a whopping $40 million investment in messaging appliance maker Barracuda Networks in a deal that was announced on Monday.
The investment, in which Francisco Partners also participated, marks the first time the technology company has taken cash from an outside source. Four-year-old Barracuda makes security appliances that protect corporate e-mail, Web, and instant messaging traffic from spam, viruses, and spyware, according to the company.
Such a sizeable investment raises eyebrows these days, especially considering many investors view the messaging security market to be beyond capacity, following the mad rush of start-ups to capitalize on the looming spam threat.
Barracuda has found a niche for itself in the small-and-midsize business (SMB) market, although in November it went after the likes of IronPort with an enterprise version of its anti-spam appliance. IronPort fired back in December with an SMB version of its e-mail security product.
Barracuda claims 30,000 customers, including Barnes & Noble and the U.S. Department of the Treasury.