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Open-source start-up helmed by Polese nabs funding

SpikeSource, led by Java co-author and former Marimba CEO Kim Polese, announces $12 million first round of funding.

After several months of cagey announcements and slow revelation, open-source start-up SpikeSource has announced a $12 million first round of funding.

The company, led by Java co-author and former Marimba Chief Executive Kim Polese, formally introduced Fidelity Ventures of Boston and Kleiner Perkins Caulfield & Byers of Menlo Park, Calif., as lead investors. Also participating were Intel Capital, the venture investment arm of Santa Clara, Calif.-based chipmaker Intel; and Omidyar Network, the personal investment vehicle of eBay co-founder Pierre Omidyar.

Founded in 2003 by Kleiner Perkins partner Ray Lane and one-time Oracle software developer Murugan Pal, Redwood City, Calif.-based SpikeSource received seed funding from Kleiner Perkins and introduced its first product into beta-stage testing last year. Since the company exited stealth mode last fall, hazy details had emerged regarding the company's investor syndicate.

Lane was reported to have led the company through its incubation stage. Fidelity's Dave Power was listed on SpikeSource's Web site as a board member.

Power said Fidelity prefers to fund companies on the verge of introducing products. He said Fidelity Ventures is especially sensitive to information-technology companies' needs because the firm monitors the massive IT operations of its affiliated financial services company, Fidelity Investments, formally FMR. He added that Fidelity "will be a customer, too."

The two lead investment firms chose to work with strategic investor Intel, which has a history of funding other open-source companies, and Omidyar Network, which says it seeks to make socially responsible investments in both the for-profit and nonprofit sectors.

SpikeSource will address the open-source software community, in which application code is distributed freely and modified by a network of volunteer users. The start-up will perform support services including software certification and testing for enterprises that use open-source code.

The company will also offer related software that helps existing applications work together. The company's software stacks are available for download and are provided through a software-as-a-service sales model.

Polese joined the company as CEO in September, and SpikeSource's services and downloadable software were formally introduced in March. The company has announced its first customer, investment bank Dresdner Kleinwort Wasserstein, as well.

Power said he anticipates that enterprises will increasingly migrate toward open-source code for a variety of reasons. "For years, developers have been looking for ways to reuse software code," he said. "It's becoming a commodity that doesn't have to be reinvented every time you want to do something."

Power added: "Open source has really unlocked a lot of potential from the venture community and made a lot of great innovations possible, (it's also) lowered costs and development time, and allowed software developers to focus more on their differentiating 'secret sauce' and less on commodity components."

Other start-ups such as Seattle's SourceLabs compete in the same market sector, Power acknowledged. But SpikeSource, he argued, leads its closest competitor in market awareness and partner relationships.

"Our main competition is companies doing all this testing themselves," he said. "We need to create awareness among developers of this new category of support, certification and testing."

Power would not discuss SpikeSource's revenue or valuation, nor would he say whether the company expects to raise additional capital. He would not name financial or legal advisers.

A SpikeSource press officer did not immediately respond to inquiries. Polese led the Sun Microsystems team that wrote the omnipresent Web software application Java in the early 1990s. A year after Java's launch, Polese co-founded Marimba, a maker of configuration management software, and served as its CEO from 1996 to 2000.

She remained Marimba chairman after BMC Software of Houston acquired it in 2004.

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