Virtual Desktop Co. Pano Logic Scores $20M For Cut Of PC Purchases
Venture Wire
By Scott Denne

With corporations expected to make a new round of PC purchases, virtual desktop maker Pano Logic Inc. has raised $20 million in Series C financing to take its cut of the action.

New investor Mayfield Fund led the up round, with participation from existing investors Foundation Capital and Goldman Sachs & Co., said John Kish, Pano Logic's chief executive. Fuse Capital is also a shareholder in the company but hasn't invested in the last two rounds, he said.

Pano Logic makes a box that connects a mouse, keyboard, monitor and any other device with a USB cable to a company's data center, where its virtual desktops can be hosted.

"It's the only company that is zero-client, no CPU, no memory, no processors and operating system," said Navin Chaddha, a managing director with Mayfield Fund. "So the value proposition becomes very strong" because it's more secure, reduces power and is easier to manage since every aspect of a desktop is in the data center, he said.

The market for virtual desktops is on the cusp of taking off, Chaddha said, in part because of the penetration of server virtualization, cheaper storage and faster networks in the data center, and because many corporations are about to begin buying PCs in bulk for the first time in a few years. Virtual desktops could cut into the PC market by 20% to 30% in the next five years, he said.

"During the tail end of 2008 and 2009, companies didn't have access to the credit vehicles they [previously] had for making large PC purchases," Kish said. Now that those are back, many are looking to refresh their PCs, he said, and they're looking at other options like virtual desktops in the process.

Last year, Menlo Park, Calif.-based Pano Logic tripled its sales to end the year with just under $5 million in revenue, and the company expects to triple that number again in 2010, Kish said.

Pano Logic also announced that it will publish the reference design to its appliance, in part to "de-mystify" what a zero-client is and to prove that it can do what it promises. It's also doing that to avoid confusion with other vendors, mostly thin-client companies that build a scaled-down version of a PC with some parts hosted in the data center, that have recently begun using the term "zero-client" as well, Kish said.

Mayfield's Chaddha has joined the company's board of directors as a result of the round.