Entrepreneurial

Seattle startup raises $1.3 million to encrypt the cloud

Kory Gill’s “a-ha” moment came in the form of a lightning bolt that struck his Seattle home and fried his computers. In the aftermath, his wife’s main concern was whether their digitally stored family photos had survived the blast.

“What more of a sign do you need to go start this company?” Gill recalled his wife asking him, who used the scare to leave a 20-year career at Microsoft (MSFT.O) and launch his own online backup company.

Three years later (Reuters first interviewed Gill in 2009), Gill and co-founder Marius Nita – a former Microsoft colleague – are seeing some traction with Newline Software Inc, having launched the first version of their online storage product, Exact, into the market in August.

Gill told Reuters they have just closed their latest financing round – Newline’s third – to bring their total funding to $1.3 million. The money, raised from friends and family, will be spent on improving the product, growing the brand and building a new software platform that will allow Newline to encrypt every piece of data stored online, or in “the cloud,” said Gill.

The platform called OPTIC (Online Privacy Technology In the Cloud) is an application programming interface (API) that Gill hopes will give Newline a competitive advantage over much larger rivals such as Carbonite and Mozy.

A look into Carbonite’s IPO

As an entrepreneur, David Friend has been around the block a few times. The 63-year-old has built and sold four companies and raised a ton of venture capital along the way. That still didn’t prepare him for the wild ride he experienced in taking his company public.

After the dust cleared, Friend was the CEO of his first publicly traded company, but one with a significantly reduced share value and market cap, as Carbonite (CARB) became the lone U.S. tech firm to IPO last week.

“Everybody was betting against us,” said Friend, whose Boston-based online backup company reduced its debut share price from $17 to $10 in order to get out, in one the worst trading periods in nearly three years. At the close of trading on Wednesday, Carbonite’s share price had jumped to more than $15. “We kind of proved everybody wrong, but it was definitely a high-wire act.”

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