Cloud Computing Firm Skytap Scores $7M More from Ignition, Madrona, WRF

What financing risk? Seattle-based Skytap, a cloud-based virtualization startup, said today it has closed a $7 million Series B funding round from previous investors Ignition Partners, Madrona Venture Group, and WRF Capital. The company said the funds will be used to bolster product development, sales, and marketing efforts.

Skytap was spun out of the University of Washington in 2006. (It previously raised a $6 million Series A round from the above investors plus Bezos Expeditions.) The company makes “virtual lab” software that helps businesses save time and money on information technology by setting up virtual machines over the Internet. The virtual machines handle things like data storage, processing, and networking for complex tasks like software development, quality assurance, training, and IT operations testing.

The key is making all these processes super-efficient to manage over the Web, and refining the user interface to be as simple and intuitive as possible. That way, companies shouldn’t need a separate technical team to set up and break down virtual environments as they go, which is costly and time-consuming for most companies to do on their own. “Skytap’s ability to deliver both hard and soft dollar savings, usually in just days or weeks, has enabled us to accelerate customer acquisition and revenue growth over the last year,” said Skytap’s chief executive, Scott Roza, in a statement.

The company’s board of directors reads like a who’s who of local IT heavyweights—founders Brian Bershad and Hank Levy from the UW’s department of computer science and engineering (Bershad is now Google Seattle’s site director), Sunny Gupta (CEO of Bellevue, WA-based Apptio, which we’ve covered here), Matt McIlwain of Madrona, Brad Silverberg of Ignition, and Roza, a former HP/Opsware vice president (and MIT alum).

Skytap’s investors seem hopeful about the startup’s chances in a difficult sales climate. “The team has demonstrated a strong record of success and proven it can sell successfully in a down economy which gives us confidence that the company will continue to thrive,” McIlwain said in a statement. Ignition’s Silverberg added, “Since Skytap has been in market they have met or exceeded every customer, bookings, and revenue goal and they are off to a great start in 2009.”

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