Vinny Smith’s recently launched venture capital firm is canvassing the U.S. in search of high-potential startups and has already joined some big names in the technology sector on one of its initial investments.
Irvine-based Toba Capital’s latest deal is a lead role on an $11 million financing round for Quorum LabsInc. in San Jose.
Toba partnered with prior investors, including the Brussels-based Airtek Capital Group, on the funding for Quorum, which makes backup and recovery hardware and software for small to midsize businesses.
The latest investment raised Toba’s portfolio to at least five companies. The venture firm has been the lead investor in four of those five deals, for a combined $37 million invested.
The Business Journal in late December reported that Smith—a longtime chairman and chief executive of Quest Software Inc. before its $2.4 billion sale to Dell Inc. last year—had started Toba with former colleagues in a bid to invest in the “next generation of IT infrastructure” (see related Special Report: Mergers & Acquisitions, page 23).
The company has since established outposts in New York, Texas and Minnesota, according to published reports.
Smith, who became Quest’s chief executive and chairman in 1997, was an avid investor and acquirer while at the helm of the company, long one of OC’s largest software makers. He oversaw more than 40 acquisitions there.
His own stake in Quest—worth an estimated $800 million in the recent sale—started with an investment through his Insight Capital Partners in 1995.
Smith’s first high profile deal came in 1994, when his Redwood City-based company Patrol Software, which made software that monitored Oracle databases, was acquired for an estimated $33.7 million by BMC Software Inc.
Toba has made at least one local investment, leading a $4.5 million funding round for Irvine-based security software maker SecureAuth Corp.
The arrival of another venture capital firm in Orange County is welcome news for the tech community here.
“It’s exactly what Orange County needs,” said Luis Vasquez, director of Aliso Viejo-based tech industry booster Octane’s LaunchPad initiative, which aims to help startups become viable businesses. “There are fewer venture capital firms and fewer deployable dollars than there have been here in a number of years.”
Toba’s other investments have been in San Francisco, Palo Alto and Boulder, Colo.
In early February it led a $10 million funding round for WSO2, a Palo Alto-based developer of middleware software geared for large corporations. Toba partnered on the deal with Cisco Systems Inc. and Intel Capital, an investment arm of Santa Clara-based Intel Corp., the world’s largest chipmaker with more than $53.3 billion in revenue in 2012.
San Jose-based Cisco is the world’s largest networking equipment and system maker with some $46 billion in annual sales.
Toba followed up that deal with a minor stake in a $2.75 million financing round for TeamSnap Inc., a Boulder. Colo.-based company that provides mobile and Web services that allow sports teams to track schedules, link members and manage other activities.
Toronto newspaper and book publisher Torstar Corp. led the round for TeamSnap. Other backers included Menlo Park-based Trinity Ventures, eonBusiness Corp. in the Denver area, and Hbam LLC, a fund launched by former San Francisco 49ers offensive lineman Harris Barton.
Late last month Toba led a $9 million financing round for San Francisco-based Codenvy, which provides cloud-based services to code, build and test apps. The company has enlisted some 50,000 developers who use the service on a pay-per-project basis.
Toba in the Codenvy deal was joined by angel investors and Paris-based Auriga Partners, which manages three funds in excess of $430 million.
