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Layer N Networks Closes Series B With $23M; Changes Name To Britestream

Tuesday, October 26, 2004

Austin, Texas—Layer N Networks closed its Series B round with $23 million and hired Bob Weinschenk as its new president and chief executive. It also changed its name to Britestream Networks as it launched its first security-processor products to market.

The B round closed in July with an extension of $3 million from new investors Venture Tech Alliance and Parker Price Venture Capital, capping the Series B at $23 million. Representatives from neither of the two new firms joined the board. The company used the Series B financing to take the products to market.

In February 2004, Layer N raised $20 million of the Series B round co-led by new investors Technology Associates Management Co., Stafford Investments, and Chisholm Private Capital Partners. This round brought the company’s total raised to date to $39.5 million.

Also in July, the company replaced co-founder and CEO Mike Salas with Weinschenk, who is 43 years old. The new CEO was hired for his experience. Salas is now vice president of marketing.

Prior to joining Britestream, Weinschenk was president and CEO of Pixim, a supplier of semiconductors and software platforms for digital image capture and processing, where he successfully raised over $55 million in four rounds of venture capital financing. Before joining Pixim, he served as general manager in the microelectronics division of Lucent Technologies.

The company changed its name as it expanded its market positioning. It originally planned to sell only semiconductor chips, but found time-to-market is substantially faster for boards than for semiconductor chips. It decided to sell both products.

BN1010 board, a PCI-based SSL security NIC, is a direct plug-in security solution for network hardware manufactures or end-users looking to secure new applications or data with no impact on their application or network performance.

BN2010 is an SSL security chip designed for original equipment manufacturers that want to integrate a security solution directly into their own product without sacrificing application performance or risking time to market.

SSL is a protocol similar to S-HTTP, developed for transmitting private documents via the Internet. SSL works by using a private key to encrypt data that’s transferred over the SSL connection.

Weinschenk emphasized what he calls its "deterministic" aspect; that the card, when run on the computer or server, doesn’t slow down network operations and doesn’t affect a computer’s CPU.

Britestream’s competitors in the SSL area of the fast-growing security market come from companies making software. In contrast to Britestream’s hardware, software uses computer energy encrypting and decrypting data, which slows down network traffic and internet response. Britestream’s product also encrypts and decrypts data, but the job is done on the card, not on a user’s CPU.

This happens because the product’s combination of networking and encryption manages the security process without relying on any external resources. This combination enables security to be deployed not only in existing applications such as servers, load balancers, firewalls, and content switches but in applications such as SSL VPNs, XML/Web Services, and secure e-mail gateways.

Founded in 2000, the company has 48 employees in its one office and will have 70 by end of 2005. "Just keep your head down and the right opportunities will happen," said the CEO about a future exit strategy. Britestream is busy setting up customers both inside and outside the U.S. and will announce several OEM partners for the new product in the next few weeks.

The company raised a $16.5 million Series A round in January 2001. Its other investors include Granite Ventures, Austin Ventures, Seed Company Partners, Convergent Investors, and Agave Capital. http://www.britestream.com

Media Contact:
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