After undergoing a business turnaround, Sepaton held a new financing round led by Menlo Ventures.

Globes' correspondent

US start-up Sepaton  (formerly SANgate Systems), controlled by Jerusalem Venture Partners, has raised $23.5 million. Menlo Ventures led the round; its first investment in Sepaton. JVP and Valhalla Partners, a new investor, participated in the round.

Sepaton, which changed its name from SANgate Systems a few months ago, has developed a storage application for protecting information. The company was founded by Israeli entrepreneurs in 2000. It closed its development center in Even Yehuda a year ago, and cut its staff to only nine. Sepaton simultaneously developed a new product as part of a business turnaround led by JVP. The new product was launched in early 2004, and has been sold to scores of enterprises.

Prior to the current round, Sepaton had raised $25 million from JVP and Battery Ventures, but after a Boston court ruled that Sepaton could not employ Doron Kempel (now CEO of Diligent), Battery Ventures decided to withdraw its support, leaving JVP the sole investor in the company. JVP decided not to close down the company, but to appoint a new CEO and inject capital to enable the company to develop and launch a new product, which has had a successful launch.