DefendNet Solutions, Inc., an Internet security firm headquartered in Providence, has received $8 million in venture capital funding that will allow the company to quadruple its work force in Providence to 80, and open a second office in Phoenix, Arizona, with about 20 employees. Vincent Giordano, the company’s president, said last week that M/C Venture Partners of Boston is investing in DefendNet and will have an equity position with the company, although Giordano would not disclose how much. “This will allow us to expand our sales reach and marketing,” said Giordano, a former senior marketing manager at American Power Conversion, who founded the company in 1996 (then Virtual Media Technologies) as an Internet integrator. Slowly the company changed its focus to become primarily an Internet security firm, and its name to DefendNet Solutions, Inc..
Giordano described the company as similar to a house or business alarm company, but instead monitoring business Internet sites for security leaks. DefendNet does not produce the security devices, but monitors the systems. Giordano said security systems are produced by a number of companies, including Cisco and Check Point.
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”DefendNet offers Internet security solutions that enable Internet Service Providers (ISPs) and Competitive Local Exchange Carriers (CLECs) to simply and cost-effectively provide outsourced managed security services to their small and medium-sized business customers,” Giordano said.
Giordano said that M/C Venture Partners often invests in ISPs, and therefore expects DefendNet to benefit from those relationships.
DefendNet, he said, intends to remain in Rhode Island with “talent, a big issue.” Contrary to what is often heard, Giordano said he believes it’s easier to attract good talent to Rhode Island than to Boston.
”We can hire with less hassle, hire quicker here (people) with a skills set I need,” Giordano said. “That means better start up time.”
He said quality of life is an issue, and that the company is competitive with Boston salaries and benefits.
While there are more companies and a larger employee pool in Massachusetts, the reality is, he said, “there are fewer available high-tech people in MassachusettsIt’s a tougher job market for employers in Massachusetts.”
Tradesafe.com, another Providence high-tech company that recently received some venture funding, had been rumored to be moving at least part of its operation to the Boston area after classified advertisements appeared in Boston suggesting the company was hiring for both the Providence and Boston markets.
Glen Ilacqua, tradesafe.com marketing communications manager, said the company was merely testing the market to see if it was easier to hire high-tech employees in the Boston area. Ilacqua said the company found no difference in the hiring markets, and is currently looking for expanded space in Providence.
Giordano said that DefendNet Solutions is also in the market for a new facility in Providence.
Tradesafe.com and DefendNet are among a number of Rhode Island companies, primarily high-tech, that have received recent venture funding. In past years Rhode Island companies rarely attracted attention from venture capital firms. Annually PriceWaterhouse would release its state by state survey, often published in the Boston Globe, that showed totals for a year in Rhode Island of $150,000 or $250,000.
Rhode Island has become more attractive to venture firms, particularly since Zero Stage Capital, a Cambridge venture firm, opened an office here. Zero Stage just issued an announcement noting three of its most recent Rhode Island venture deals: Spherics, a Warwick bio-technology firm, received $4 million in January; BlueStreak.com, an Internet company in Newport, received $7 million in December; and Livewave.com, a company that provides broadcast quality, interactive video and audio over the Internet, received $1.5 million last May.
