VirtuStream Inc., 9/1/09 private placement. Columbia Capital and Florida based Blue Lagoon Capital put some big second round money ($25 million) behind this Bethesda IT services company… that provides the latest IT infrastructure designs using traditional and virtual based technologies. “Virtual” or “virtualization” is the operative word that drives the investment. This is a lot of money in this region for an IT company. Other than telecom infrastructure plays and the ever-voracious biotech sector, regional IT companies are more Internet-centric and/or application development oriented. Ten to fifteen million dollars is usually a very healthy second round. A decent portion of this investment went immediately into two acquisitions, including Germantown based Brigh Technologies (again “virtualization”), but that doesn’t diminish the card being played. Virtualization has the potential of being The Next Greatest Thing in IT—or maybe one of them. A simple explanation is that virtualization is the liberation of applications, operating systems, storage, and whole networks from the underlying hardware and equipment. (An example on a micro scale would be thumb drive software where you can carry your personalized applications in your pocket and run them on any PC in the world.) When two funds put $25M into an investment, you can be certain that the funds have spent a lot of time speculating on the future and are looking for far more than a basic $50M M&A exit. In decades past, Columbia has made a few fortunes based on its willingness to place big bets in the communications sector. Stay tuned.
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