The Cetas Story

By: Sumant Mandal

It is an interesting experience to sell a company.  I’ve been fortunate enough to participate in a few successful sales recently, but have to admit that each one is a different emotional experience.  It’s probably like watching your kids leave home for college (something I still have to experience).

Venture capitalists are normally considered just a source of money, but when you build a company inside your own office, it’s a very different experience.  The process of incubating an idea with entrepreneurs, building a team, developing a product, executing a strategy, and then seeing a successful acquisition, all  within one year, is full of excitement, anticipation, anxiety, and fulfillment.  Such is the story of Cetas – a company incubated at Clearstone – and sold to VMware last week.

The Cetas story is based on trusted relationships.  I have known Sudhakar Muddu, the CEO and cofounder, for almost 8 years.  Together, we studied storage / data markets, created and invested in Kazeon, and recruited the multi-talented Christos Tryfonas (who later became a co-founder of Cetas).  In 2009, we sold Kazeon to EMC after raising tons of money, building a good operating business, and riding the highs and lows typical with startups.

When Muddu decided to transition from EMC, and came to me with the idea of building a “big data” company, I was intrigued.  As an investor in several companies (Rubicon, Games2Win, Billdesk) that manage mass data and process billions in payment volume – I have seen the unprecedented growth of data generated by online applications.  Muddu and Christos had a lot of passion for the market space and their track record indicated that they could define the winning product.  Boy, did they!

I’ve had very few experiences where one sees a product get so much early attention from the end users.  Early on, we arranged many meetings with large web properties where management teams were wrestling with gleaning intelligence from unstructured data.  They wanted the product NOW!!!  The best way an investor can share a vision with founders is to be involved in early product meetings and to viscerally feel the need in the market.

Even though Cetas was only a year in the making, the team decided to sell to VMware.  While we were gearing up to bring the product to market in an aggressive fashion,  we knew from past experience (Integrien, a real time performance analytics portfolio company, sold to VMware in 2010)  that VMware excels in taking new product to market.   In the end, it was the team’s decision.

The business of investing in early stage companies has changed dramatically in the last few years.  Cetas was built faster, with fewer people, and cheaper, than any of the enterprise grade product companies in our history.  Faster sales, deployment and delivery mechanisms allowed the company to get product to market on a smaller first round of capital.  It is also worth mentioning that True Ventures proved to be a great co-investor understanding the needs and pace of an early stage tech company.

What has not changed, however, is the amount of attention required to take an idea and build it into a successful company.  Kudos to the team, once again, for burning all sorts of midnight oil to do this. Thanks to TM Ravi and Karthik Kannan for putting their energy into bringing this product to market.  And, thanks to Clearstone’s extended ecosystem of customers, partners, and industry experts who brought their knowledge, experience and relationships in defining this path to success.

Cetas was an early believer in the power of platforms like Hadoop, and they demonstrated that apps based on such technologies can be a big hit with customers.  The recent Splunk IPO is another indicator of the power of these platforms.

At Cetas, the team’s execution was beyond compare and for me it was a real learning experience on what the “new” early stage venture model can look like.

Venture capital is not just about the money you invest.  It is about the time, attention and energy you bring to your investments and about building mutual respect and trust with the entrepreneurs.  Congratulations to the Cetas team.  It is a real honor to be able to work with smart entrepreneurs who enjoy using their past success to forge new companies.