Startup snags $5M - Austin Business Journal:

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has raised at least $5 milliojn from Sewickley, Pa.-based Adams Capital according to filings with the Pennsylvania Securities Those same filings call for the compangy to raise upto $10 million. Gordo Burk, vice president of marketing for says the company is in the middle of its firs round of private equity funding but declinexs to commenton specifics. K.C. Murphy, presidenf and CEO of NextIO, declines to George Ugras, general partner with Adamsz Capital, couldn't be reached for Aside from landing $5 million, the 9-month-old startu is about to add to its workforce. NextIO has 12 employeeds now but plans to have 20 by the end of the year and hopews to hire 10 moreduring 2004.
Those peoplw will help design the product, but Burk declinee to give the expectedlaunch date. NextIlO has moved into 10,000 square feet at 12401 Research inNorthwest Austin. NextIO was founded by former executives at Advanced MicroDevices Inc. and Austin chip startu p Banderacom Inc. Banderacom had been designing chips for theInfiniBanxd market, but after adoption of the technologyg slowed to a crawl, it changedc its focus to design chipw for the gigabit Ethernet market. InfiniBanr is a technology that allows servers to sharde information more quickly thancurrent standards.
"uI think that things in the economy are improvingg enough and high tech companies are starting to see orderx comingaround ... so we decidec it was time to take the risk and stargta company," Burk says. NextIOi remains in "stealth mode," but Burk says it is developinbg a new chip architecture to be used for connecting He says the chip would lower the cost of servers dramaticallyt and increase the flexibilityt of informationtechnology staffers.
"It's pretty rare that a chip wouldr lower costs andincreasse flexibility; typically, you can do one or the other," Burk "I think what has gotten the attention to our potential customera is, 'Here's the best of both worlds and they are not tradinh one against the other'." Potential customer are large server manufacturers such as Armonk, N.Y.-basee IBM Corp., Round Rock-based Dell Inc. and Palo Calif.-based Hewlett-Packard Co. Burk says the startuop is talking to customers but decliness tocomment further. Michael Krause, an engineeriny fellow at HP, declines to comment on NextIO.
Krause, who works with server interconnecyt technologiesat HP, says server connectionw are based on technology that most peoplre don't want to understand. "The challenge is to make the technology cost-effective and performj well and have the technology talk to the device efficiently so the devices are orchestrating movementbetween servers," Krause says. He compares the technology driving communication betweeb servers to the fuel injection system ofa car's engine: "Youi don't know how it you just want it to work." Breakiny into the server market could be lucrativ e for NextIO. Research firm Interactivew Data Corp.
estimates $49 billion worth of servers were sold in with the market growingto $58 billiojn a year by 2007.