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Early stage venture capital firm vSpring Capital-backed IT firm FatPipe Networks is looking to raise Rs 49 crore (a little over $10 million) through a public issue. It will use the funds to expand the product line, establish new marketing offices globally, strategic acquisition, meet margin money for working capital requirement besides other expenses.

The Chennai-based firm is into technology for WAN optimisation, security and bandwidth management. The promoters had merged operations of another group firm Ragula Systems Development Company that was based in Utah (US) two years ago. Ragula was, in turn, backed by a string of VC firms who now have a significant exposure in FatPipe.

Ragula had first raised $1 million in Series A funding from Draper & Associates, Wasatch Ventures and UTFC in 1996. It then went for preferred B Series financing to raise $8.1 million from VC firms and individual investors in April 2001 and approached vSpring for Series C finance in October 2002.

The key financial investors in FatPipe include vSpring (22.12%), Wasatch Ventures (8.85%), Draper & Associates (3.99%) among others. In total, corporate bodies own over 44% in the company and individual shareholders have 18% stake. Promoters Ragula Bhaskar and Sanchaita Datta own around 37% in FatPipe.

For the nine months ended December’09, FatPipe had total income of Rs 45.91 crore with net profit of Rs 5.2 crore.

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