CDN Highwinds Raises $55 Million, Targeting Resellers

This morning, Highwinds announced it had raised $55 million from General Catalyst Partners and Alta Communications. Highwinds plans to use the capital to do additional build out of their network named "RollingThunder" which includes a CDN offering.

While most CDNs are all going after the same customers, Highwinds is taking a different approach by going after those who want to resell content delivery services to their own clients. To date, most CDNs either don't have a reseller program at all or their tool sets don't support resellers properly. Resellers need products that allow for sub accounts, reporting based on multiple directories, self provisioning and many times custom branding. To date, most CDNs don't deal with resellers well, don't have the proper customer support for resellers or don't have the tools to allow for a lot of the specifics resellers need.

For me, the real question is whether or not there are enough resellers out there to really scale a business past $30-$40 million a year in revenue. I know some are going to point to Akamai's 2007 revenue of $636.4 million and say that about 20% of it came from resellers and hence the market is there, but we don't know how much of that nearly 20% in reseller revenue came directly from Akamai's content delivery services.

With Panther Express and Velocix (CacheLogic) having announced their funding a few weeks ago and now Highwinds, that pretty much leaves only Pando Networks, BitGravity and Voxel.net as the remaining CDNs from the list of 30 who have not raised money in the past 12-18 months or are public companies.

Comments

[Christopher Levy]

Congrats to Steve, Craig, Mark, Trent, James and the whole HighWinds Crew. If you have not seen their SiteTracker product you need to check it out. Good stuff, well designed and a solid user experience.

[Patrick Hiatt]

Congratulations on the the big raise and new CDN offering!

[grinsandfun]

Pando Networks Inc., a New York-based provider of P2P file-sharing software, has secured $8.12 million of a $20.89 million Series B round, according to a regulatory filing. www.pando.com (PE WEEK)

Dan - this was announced this morning. Also - Series B round - this indicates there was at least one before this one - do you know when this was?

[None]

Lunacy. We are definately at the fools money stage with this market.