Monday, January 14, 2008

Tervela taps $20M, Cramer as CEO

By Efrain Viscarolasaga

Former LiveVault Corp. president and CEO Robert Cramer has landed a new gig at Tervela Inc., a startup making a high-performance messaging switch for enterprises in high-volume industries, such as financial services.

With the appointment, as well as a $20 million Series C round of funding that closed last month, Tervela has also moved its executive team and much of its operations from New York to Acton. Founded in 2004 by CTO J. Barry Thompson, the company has more than doubled its staff to more than 60 employees, most of which work in the Acton office, said Cramer.

The Series C round was provided by the Boston office of Sigma Partners and its managing director Robert Davoli, among others. Cramer also invested what he would only characterize as a "significant amount" of his own money in December 2007. He also declined to detail other financial information about the company, but said Tervela has raised a total of $32 million since its inception.

Cramer said he expects demand for the company's fast-message-enabling switch to require a boost in staff again this year, by 30 percent to 40 percent. Revenue, he said, is on target to exceed growth of 100 percent or better.

Tervela's messaging switch is aimed at handling millions of messages such as quotes, solicitations and transactions, nearly instantly.

Such a value proposition could be attractive in the financial services market, said Shane Hughes, CEO of Waltham's Pyxis Mobile Inc., a developer of wireless applications to the financial services industry.

"If I can execute a trade faster than my competition, I might be able to get a penny or fraction of a penny advantage in price," he said. "This can add up quickly over the course of an average trading day, week or month."

The company has been developing its messaging switch for three years, and brought in Cramer to help take the company through the commercialization stage, something he did successfully at LiveVault, which made one of the first software-as-a-service applications in the IT infrastructure. LiveVault was sold to Boston's Iron Mountain Inc. in 2005 for $50 million.

Tervela's main competition is software-based messaging systems made by companies such as California-based Tibco Software Inc., a $500 million public company that focuses on service-oriented architecture applications for enterprises. Tervela officials say it is the first to approach the problem with a hardware product.

The market, termed "low latency messaging middleware" is expected to rise from $95 million in 2007 to $168 million in 2010, according to a recent report from financial industry analyst firm Tabb Group in Westborough.