IIX Raises $26M from Silicon Valley’s VC Heavyweights

IIX, the startup that is addressing the growing need companies have for interconnecting their networks with other companies’ networks, has closed its second funding round, raising $26 million from a group of well-known Silicon Valley venture capitalists, tech entrepreneurs, and executives.

According to IIX and others, such as data center and interconnection giant Equinix , demand for private network links between companies’ own servers and the servers of their cloud providers and partners without using the public internet is growing. Companies don’t trust the internet with sensitive corporate data and don’t want to rely on it for critical applications because of concerns with both security and performance.

Many cloud service providers, including the biggest ones, such as Amazon, Microsoft, Google, and IBM, offer the option of connecting to their servers directly, and data center providers and network carriers help facilitate those links. But setting up such a private connection is a complex engineering task, and most enterprise users don’t have the in-house expertise to do it themselves, according to service providers.

Equinix recently launched professional services specifically to help customers set up the links, and IIX built a platform that automates interconnection provisioning. The platform, called Console, is a Software-as-a-Service application that the startup claims makes interconnection between any of the 150 data centers around the world it’s available in as simple as a click of a button.

“This is the biggest platform of its kind today that is focused on direct interconnection,” IIX founder and CEO Al Burgio said.

Among investors that participated in the company’s latest funding round is New Enterprise Associates, one of the biggest and oldest venture capital firms that recently closed on a $2.8 billion fund – the biggest in history of venture capital. NEA is the only Series A investor that also participated in the Series B round for IIX.

The round was led by Formation 8, one of the hottest newer VC firms that recently broke up. Its three founders decided to go their separate ways, but the firm said it will continue working with companies it has invested in already and investing the money that’s left in its most recent fund.

One of Formation 8’s founders, Jim Kim, has joined IIX’s board of directors. Before starting Formation 8, Kim was a general partner at Khosla Ventures, another one of Silicon Valley’s cornerstone VCs.

The group of investors in IIX’s Series B also included Andy Bechtolsheim, co-founder of Sun Microsystems and founder of Arista Networks, and Drew Perkins, co-founder of the optical networking giant Infinera Corp., whose optical interconnect technology links some of the world’s biggest data centers to each other.

Also on board are Yahoo co-founder Jerry Yang’s AME Cloud Ventures and Rajiv Ramaswami, the man in charge of Broadcom’s infrastructure and networking group.

The round brings the total amount of capital IIX has raised to $65 million, including debt and equity. According to Burgio, the company had to turn some willing investors down.

“We were offered quite a significant amount of money, well beyond what we decided to take in,” he said. Asked what the company’s criteria for selecting investors were, he said, “chemistry, obviously. We don’t just want people’s money; we want people that get it.”