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Basho Technologies Inc. has taken another step off the beaten path. As its emerging NoSQL category of database management software heats up, the Cambridge startup held a first close this week at $1.5 million on a planned $2.5 million Series C round from friends, family and angel investors.
Now three years old, Basho has held 140 meetings with venture capital investors but failed to generate a single term sheet. Customers have been more receptive: Comcast Corp. (Nasdaq: CMCSA), the Mozilla Foundation, Vibrant Media Inc. and Wikia Inc. have all signed contracts with the company.
“We’ve been punched, kicked, spit on and thrown out of offices for years. And we’re still here,” founder Earl Galleher said. “This company is going to be big.”
Like competitor NoSQL databases Cassandra, CouchDB and MongoDB, Basho’s Riak database management system is designed as a high-availability, highly scalable alternative to the traditional relational database management system (RDBMS) based in the SQL computer language. Riak is written in Erlang, a little known programming language that has growing cachet with developers.
Galleher says Riak is to the database layer of a network what Akamai is to the content layer. Galleher and co-founder Antony Falco are both former Akamai employees.
Basho’s founders and a handful of existing angels have already invested $10 million in the company. With 21 employees and plans to hire a handful more – mostly engineers and customer support - co-founder Earl Galleher said the current round will take the company to profitability. Its pre-money valuation on the Series C round is $15 million, Galleher said. By not taking VC, the company has preserved a 30-percent options pool and spent about three-quarters of it on its early employees, he said.
Investors in the new round include Eric Brewer, a well-known database theorist at University of California Berkeley, who joined the company’s board of directors in the spring.
Galleher speculated Basho’s rocky reception with VCs may have something to do with a change in the company’s story. When it launched, Basho was selling itself as a sales force automation (SFA) company. The SFA tool was a test case for the underlying database, Galleher said – but ironically, the founders, acting on VC advice, emphasized the tool over the database.
Now the company has had trouble with VCs who remember its early story.
“If you go in and say, ‘Here’s what we are,’ and you come back in and say, ‘We’re something else,’ you could be the Queen of England and they say, ‘You’re ugly, get out,’” Galleher said.
He conceded his own sharp tongue and stubbornness may also have had something to do with it.
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