STI Ventures invests $0.5 million in startup eZaro

If approved for use by AT&T and UUNET, startup's load-routing tech could yield eZaro $10 million in revenues
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STI Ventures has invested about $500,000 in the Israeli startup eZaro, which developed a platform to alleviate Internet infrastructure overloads.

eZaro's platform redirects IP traffic and content across global network resources. The solution is intended to prevent system overloads, keeping popular websites available, and improving their performance during heavy surfer traffic.

EZaro CEO and founder Ronnen Edry told TheMarker.com that the proceeds will be used to finance tests already begun last month with U.S. communication providers UUNET and AT&T Corporation (NYSE:T).

Once the tests materialize into a deal, Edry estimated, revenues could reach $10 million.

Edry added that eZaro is in talks to place another $4 million to $7 million worth of equity with other Israeli venture capital funds. eZaro was founded in August of 1998 by Mentergy (Nasdaq:MNTE - formerly known as Gilat Communications) vets Ronnen Edry and eZaro CTO Yitzchak ("Zack") Silbinger.

Professor Danny Dolev, the head of the School of Engineering and Computer Science at the Hebrew University, Jerusalem, heads eZaro's research.

Other partners in the startup are Danny Kalmanson, former Aurec president, and XOR Technologies, which provided he startup with incubation services.

In September 2000 the company raised $2 million from STI Ventures according to $8.5 million after the money. STI was then given the option to increase its holdings in eZaro to 30%.

The company recently announced its marketing co-operation with the American Resonate, a developer of management solutions for online business applications.

EZaro is based in Petah Tikva but incorporated in the United States. It employs 18 workers at its Israeli R&D facility.