ONARO

ONARO

ONARO was a leader in storage service management (SSM). The company’s solutions enabled enterprises to increase service quality, return on storage investment, and compliance by managing storage as a service. Onaro was acquired by Network Appliance in January of 2008, resulting in a strong return for our investors.

Company

Boston-based Onaro is a market leader in an ultra specialized area of data center automation: the efficient management of Storage Area Networks (SAN). Its products help simplify the process of effecting changes in corporate SAN hence improving service quality and ensuring compliance with access and security policies. The Company’s products are installed in the world’s largest companies in the banking, retail, entertainment, and communications industries.

Financing

The Company was launched by a small group of engineers in 2002. In April 2004, Newbury Ventures led an $8 million expansion financing round, mainly to help the Company take its software products to market. At the time of our investment, Onaro had one customer and 18 employees, mostly engineers. Shortly after our investment, the products were successfully launched and commercial activities shifted to high gear. To finance working capital, Newbury assisted in securing an additional $2 million venture debt from Comerica Bank in 2006. Onaro has been cash flow positive since.

Growth

Onaro is a remarkable success. In three years, it grew its work force of highly talented professionals from 18 to 60+ people. It expanded internationally, establishing offices in New York, Chicago, San Francisco, and London. Bookings ballooned to approximately $7 million per quarter. Its customer list expanded to 100+, including over 30% of the Fortune 50 companies – brand names such as Wal-Mart, Goldman Sachs, Dell, Boeing, Ford, JP Morgan, Time Warner, Qualcomm, Target, eBay, Visa, United Health, Countrywide, and Vodaphone among others.

Corporate Governance

Newbury Ventures’ role as value-added investor included the following notable achievements:

• Recruiting Doug McNary, former VP of Sales at Tivoli, to be the CEO of Company while ensuring a smooth transition from the founder to the new CEO;

• Refining the senior team in non-technical positions, mainly sales, finance and business development;

• Advising the Company on pursuing an OEM strategy with large storage and systems vendors, which positioned the Company for an acquisition;

• Working with management and the Board to set annual corporate objectives in the key areas of customer acquisition, product development, business development, and finance;

• Improving financial reporting and governance control;

• Working closely with the management team to ensure that hiring plan stays in line with revenue growth to achieve sustained profitability and minimize capital needs; and

• Advising the CEO on exit strategies and negotiations with potential acquirers.

Exit

The Company’s success and enviable market position were richly rewarded. In November 2007, Onaro received an offer to be acquired by Network Appliance. The transaction closed on January 28, 2008. Our $4.3 million investment in April 2004 yielded $28.9 million in sales proceeds. Newbury Ventures achieved a 6.7x return on invested capital and a gross IRR of 64%.