Cloud Start-up E2E Networks Raises Seed Round Of Funding From Blume Ventures, Murray

Cloud computing provider E2E Networks Pvt Ltd has raised its seed round of funding from early-stage fund Blume Ventures and Freeman Murray, co-founder of Bangalore-based community project Jaaga.

The funding, concluded in March, is a combination of preference shares and convertible debt. The size of the deal was not disclosed. Blume Ventures typically invests between Rs 50 lakh to Rs 8 crore in start-ups. It was founded by two Mumbai Angel members Karthik Reddy and Sanjay Nath, who have, either in their personal capacity or as members of the Mumbai Angels network, invested in start-ups such as mobile TV provider Apalya, mobile advertising firm InMobi, mobile enterprise and loyalty platform provider MobiQuest, imaging technology start-up Serial Innovations, hospital management solutions provider Insta and Chennai-based online travel agency Atyourprice.in. Murray helped run the start-up incubator at IIM Ahmedabad called iAccelerator and is the co-founder of Jaaga.in, a community project which offers facilities to young tech start-ups in India. E2E will be using the funds raised in technology and research & development, and plans to expand its presence in India. It currently has cloud and dedicated hosting facilities in three data centres in Delhi and Mumbai, and will be establishing three more in Hyderabad, Pune and Chennai by next year. E2E was founded in 2002 as a hosting and data centre consulting firm and re-invented itself in 2008 as a home-grown cloud computing venture, and began to offer dedicated hosting in November 2009. It also offers managed public cloud services for Internet companies and enterprise applications. The company buys IP transit access from its partners which connect to all ISPs (Internet Service Providers) in India directly or through NIXI. "We started at a time when bandwidth prices in data centres in India were a ridiculous Rs 200 per GB at volumes and Rs 700 per GB at retail, and we practically shorted the whole bandwidth marketplace by buying and selling low while waiting for the prices to crash and crashed they did," says Tarun Dua, CTO, E2E Networks. The company claims it is EBITDA positive. E2E Networks specialises in servicing a glut of Indian Internet start-ups running lean operations. Dua says start-ups have migrated to its hosting and cloud computing platform from global providers such as Mediatemple, Amazon, Rackspace and Liquidweb. Customers include Internet-based start-ups such as group buying site Groupon India (sosasta.com), online restaurant listings site Zomato.com, Tehelka.com, Tribal Fusion, Gadgets.in, as well as auto portals Cardekho.com and Gaadi.com, and new media sites VCCircle.com, Medianama.com and Pluggd.in. "The common demand from such start-ups is low latency hosting in India with reliable on-time technical support," says Dua. On the current cloud computing scene in India, Dua says that although cloud computing offers the ability of handling computing needs without adding to complexity, it is still hindered by high prices being quoted by providers today. "Cloud will take off in India but what will not work is a promise of the moon without delivering at a price sustainable in the Indian marketplace," he says.

The company claims it is able to offer affordable infrastructure by offering vertical integration and through efficient data centre usage. It also adheres to Indian regulations and the reality of unreliable underlying power and network infrastructure that the country suffers. Editor's note: VCCircle websites are hosted on E2E Networks.