Data management center operator Peak 10 has obtained $9.2 million in third-round venture financing to continue to expand its operations across the Southeast and Mid-Atlantic regions.
Existing investors Frontier Capital of Charlotte and Seaport Capital of New York provided the funding. Since its inception two years ago, Peak 10 has obtained more than $23 million from angel investors and venture capital firms.
Peak 10 currently has two data centers, in Charlotte and Jacksonville, Fla., and plans to open a third next month in Tampa. Director of Marketing Beatrice Edwards says the new cash infusion will help the company expand into at least two more cities by the end of the year, although she declined to name prospective locations.
“We’re interested in so-called Tier 2 cities,” Edwards says. “We don’t want to move into the big high-tech meccas like (Washington) D.C. or Silicon Valley. We think our niche is in the smaller but growing areas.”
Secure data management
Peak 10 provides customers with web hosting services, secure storage of enterprise system data for clients who can’t or don’t want to invest in multiple firewalls and intrusion detection systems and back-up computer networks in the event of a disaster. Edwards says the increased attention paid to security issues since last fall is creating more interest in the company’s services.
Because most customers like to have their data close by when they aren’t managing it themselves, selection of markets is critical to future growth prospects, Edwards says.
Peak 10 serves customers such as Wachovia in Charlotte and Allstate Financial in Jacksonville, and Edwards says the first customer in Tampa already has been lined up.
While some larger data management firms expanded rapidly with the Internet boom, building massive facilities nationwide, they have had to scale back operations over the past two years as the economy screeched to a halt.
Peak 10 wants to expand slowly to avoid a similar growth roller coaster, according to Edwards. The company secured a commitment of $18.5 million in venture capital a year ago but wound up using less than half of that for its operations, she says. The commitment has since expired, which required the company to pursue the current funding round.
Buy or build
As competitors scale back, Peak 10 also has the opportunity to pick up their shuttered operations at a discount, she says. “It depends on the market, whether we view it as easier to buy or build,” she says.
In addition to expansion capital, the new financing will fund the Charlotte and Jacksonville data centers until they become cash-flow positive, which is expected in October, Edwards says.