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E-mail start-up gains key backing

The CEOs of Hotmail and PayPal are some of the investors behind Internet-messaging company IronPort, which says it can streamline the transmission of messages.

A group of investors that includes the CEOs of Hotmail and PayPal is backing a new Internet-messaging company that says it can streamline the transmission of messages.

IronPort Systems on Tuesday announced that it has raised $3.9 million in financing. Investors include Hotmail founders Sabeer Bhatia and Jack Smith, PayPal CEO Peter Thiel, and former Whistel Communications CEO and Brocade director John Hamm.

Smith and Bhatia had already been part of an earlier funding round for the company, then known as Godspeed Networks.

IronPort also on Tuesday announced its new AsyncOS operating system and strategic alliances with Dell Computer and IDEO.

The company has not released details about its products, except to say that it will launch an e-mail gateway in the spring of 2002. But founder Scott Banister does say in a release that AsyncOS "can process messages 1,000 percent more efficiently" than traditional systems.

E-mail gateways manage a wide variety of e-mail management and routing tasks, such as looking up Internet Protocol numbers, which identify someone's computer on the Web, and establishing connections with other e-mail systems.

Industry analysts said IronPort is addressing a legitimate need for updated e-mail infrastructure software.

"Critical parts of e-mail are still done with free software that has evolved over 20 years," said Peter Christy, analyst with the Netsedge Research Group in Los Altos, Calif. "And it's hard to imagine how much the world has changed in those 20 years. IronPort has carefully reengineered an e-mail gateway for today's technology and Internet."

Christy said IronPort faced stiff competition in its market from the likes of Microsoft and IBM's Lotus subsidiary. But in choosing to target high-volume e-mail senders, the company stands a good chance of maneuvering around the software giants and possibly becoming an attractive acquisition candidate, he said.

Banister, who will be chief product officer of the new company, also founded ListBot, which is now owned by Microsoft. Former Microsoft and Hotmail executive Scott Weiss will be CEO of IronPort.