Quallaby Manages $9M Venture Network

Woburn, Mass.-based network management software developer Quallaby Corp. raised $9.5 million last month in its second round of venture financing.

Commonwealth Capital Ventures of Wellesley, Mass., led the transaction followed by first round investors North Bridge Venture Capital and Matrix Ventures. Following the transaction, Rob Chandra of Commonwealth will join the company’s board of directors.

Quallaby creates software for network management that is targeted toward three customer groups – engineers at service providers, sales forces at the same companies and end users that analyze reports on the use of the software.

“This market is growing quickly, and we see it splitting into two segments,” said Chief Executive Greg Ferguson. “Including middle and low-end enterprises and the high-end … which our product targets.”

Ferguson identified Internet service providers, competitive local exchange carriers and other network service providers as representative of the high end. The software product enables customers to introduce higher margin service offerings, such as marketing campaigns that the software allows analysis and report preparation.

Currently the software is available for either NT or Unix stations, and Ferguson said analysis reports can be sent to the printer screen or posted on the Web for perusal by any number of users in the enterprise.

Proceeds from the financing will primarily serve as working capital for the marketing of Quallaby’s product, which Ferguson anticipates will sell very well to the headcount intensive professional services area. Additional proceeds will be used to further expand the sales and service teams.

The company raised its first round of financing last September and used that infusion to round out the management team and introduce the software system product.

“This round will take us a good way toward an IPO,” Ferguson said. “Clearly, if we need an additional round it would probably not be in the venture community.”