NetSift News: Cisco Buys 1-Year-Old NetSift For $30M In Cash, Options; Raised $3M

June 28, 2005

Cisco Systems Inc. agreed to acquire network analysis company NetSift Inc. for approximately $30 million in cash and options just one year after the start-up raised its $3 million Series A round.

In June 2004, Enterprise Partners Venture Capital was the sole provider of NetSift's lucrative Series A round, Managing Director Tom Clancy said. "We got a very good return on our capital," he said.

Founded in June 2004, NetSift develops content packet processing technology focused on high speed networking and security. The companies declined to get more specific about the technology.

NetSift technology was based on research from the University of California, San Diego. The company was co-founded by President and Chief Technical Officer George Varghese, who is a professor in the department of computer science at the university. NetSift has 15 employees, which Cisco plans to keep.

The NetSift acquisition will help Cisco to accelerate the integration of additional packet processing capabilities into future core Cisco platforms, such as modular switching, said the networking giant in a release.

Upon close of the transaction, NetSift will become part of Cisco's Internet systems business unit. The deal is expected to close by July 30.

NetSift originally approached Cisco to form an original equipment manufacturer relationship. "In the end, they felt acquiring the company was the right outcome for all of us," said Clancy, who is also NetSift's chairman.

Enterprise Partners capital came from both Enterprise V, a vintage 1999 $313 million fund, and Enterprise VI, a vintage 2001 $350 million fund, Clancy said. The firm will begin fundraising for Enterprise VII later this year.