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[ISN] Network Chem Gets $6 million



http://www.redherring.com/Article.aspx?a=11794

April 14, 2005

Wi-Fi network security company Network Chemistry said Thursday it
raised a $6-million Series A from VC investors including the CIA's
In-Q-Tel investment firm.

The company, based in Menlo Park, California, makes radio frequency
appliances to monitor Wi-Fi networks. The appliances send messages
back to a server installed with Network Chemistry software designed to
optimize network performance and keep hackers off the data-laden
airwaves.

Geneva Venture Partners led the investment round with help from
In-Q-Tel and Innovacom, the venture arm of France Telecom [1].

"This is an ideal group of investors," said CEO Rob Markovich.

The company impressed VCs last fall at the annual Silicon Valley Bank
"best new startup" contest, winning first place in a field of 10. The
firm was also profiled by Red Herring (see Wardriving Along Sand Hill
Road) [2].

The market for security software to keep Wi-Fi hackers off the network
is taking off. Frost & Sullivan predicts companies will sell $200
million in Wi-Fi protection appliances this year. That's double last
year's figures.

But Network Chemistry isn't the only startup trying to take advantage
of this new market. Competitors include AirTight, which got $10.25
million from VCs last year (see VC Action: AirTight Networks Gets
$10.25-million Series A for Wi-Fi security [3]). AirDefense and
AirMagnet, both Red Herring 100 companies, are also fighting for
lucrative contracts (see Top 100 Innovative Companies) [4].

Traditionally, Wi-Fi security companies started with a radio-frequency
monitoring device and overlaid security on top of that. On Tuesday,
eEye Digital Security announced its entry into the wireless protection
market. The company sells vulnerability assessment tools and
intrusion-prevention software (see Top 100 Innovative Companies: eEye,
Beyond Patches) [5]. eEye has made its Retina network scanning product
Wi-Fi-compatible. Although its new software won't do everything
Network Chemistry's will, it's clear that cutting-edge security
companies are looking to develop a Wi-Fi strategy.

[1] http://studio.financialcontent.com/Engine?Account=redherring&PageName=QUOTE&Ticker=FTE
[2] http://www.redherring.com/Article.aspx?a=11790&hed=Wardriving+Along+Sand+Hill+Road
[3] http://www.redherring.com/Article.aspx?a=11027&hed=VC+Action:+AirTight+Networks+gets+$10.25-million+Series+A+for+wi-fi+security
[4] http://www.redherring.com/Article.aspx?a=11067&hed=Top+100+Innovative+Companies
[5] http://www.redherring.com/Article.aspx?a=11057&hed=Top+100+Innovative+Companies:+eEye,+Beyond+patches



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