Datapower: some acquisitions become great acquisitions
Short of an IPO, the best token of a success for a VC is an acquisition that becomes a great product line for the acquirer. Whilst the pitfalls of acquiring startups are well known, it is a great source of satisfaction for the entrepreneurs and their backers to know that they have built a product and organisation that has legs and really helps the acquirer expand its business. Whether customers keep buying is the real acid test, regardless of how hyped the market was and of the valuation achieved.
So my partner Jeff Fagnan was quite chuffed to see this article come out:
In October 2005 IBM acquired our portfolio company DataPower. It looks like they made a wise move. They made us happy but obviously bought well and are building further value.
Not all acquisitions in the computer industry work as well as the buyers and sellers hope, but IBM’s purchase of DataPower’s XML hardware accelerators, now re-branded as WebSphere DataPower SOA Appliances, seems to have justified last year’s hype, scoring 40 new customer wins in the year’s third fiscal quarter.
Jeff and Ron Schreiber, then at Seed Capital Partners, led the first round of fuding and backed Datapower’s Eugene Kuznetsov. After Jeff joined Atlas, he convinced us to re-invest in the company as lead on the Series C, and a good thing we did too !
For your mild amusement of the day, here is the old profile of Eugene on O’Reilly’s XML.com:
Eugene Kuznetsov is the founder of DataPower Technology, a stealth-mode startup providing next-generation XML acceleration solutions. He was previously involved in three different optimized Java VM implementations, and led the Java JIT Compiler effort for the Macintosh version of the Microsoft Internet Explorer 4.0. It is not known what he does to relax.