GlassHouse Sees $9.8M While Waiting For IPO

By Scott Denne — DowJones VentureWire

GlassHouse Technologies Inc., a data storage consulting and services company that filed for an initial public offering a year ago, has confirmed that it secured a $9.8 million Series F round.

The round, initially disclosed in a filing with the Securities and Exchange Commission, was raised to strengthen the company's relationship with two strategic partners, Dell Inc. and Cisco Systems Inc., who participated in the round, according to an email response from Mark Shirman, the company's chief executive. He declined to comment further, citing the company's quiet period.

GlassHouse's services encompass storage, servers, data centers, managed services, project management and customer support services. The company is unique because it is the only storage-focused consultancy and because, unlike other IT consultants, it doesn't sell hardware and software or get marketing kickbacks from vendors, Shirman previously told VentureWire.

Last December, the Framingham, Mass.-based company filed to sell up to $100 million of common stock on the Nasdaq Global Market under the symbol GLAS. The filing is still pending.

At the end of 2007, GlassHouse had $13.7 million in losses on $60.5 million in revenue, with its 20 largest customers accounting for half that amount. It had just under $6 million in cash on its books at the time, according to its most recent S-1 filing.

The company has been a prolific acquirer, having purchased four companies and spending more than $30 million in 2007. The most recent purchase, DCMI Ltd., gave GlassHouse a valuation of about $122 million.

The company's largest backers are Sigma Partners, with a 27% stake; GrandBanks Capital, with 13%; Kodiak Venture Partners, with 11%; and Paladin Capital Group, with 10%. Those firms led GlassHouse's Series A, B, C and D rounds, respectively. Globespan Capital Partners, which participated in all rounds since the B round, but never as a lead investor, owns 5% of the company.

Montagu Newhall Associates led the company's $7.5 million Series E a year and a half ago, but is not listed in the S-1 as owning more than 5% of the company.

GlassHouse's primary competitors are International Business Machines Corp., Hewlett-Packard Co., Accenture Ltd. and EMC Corp.