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Durham, N.C.-based Arsenal Digital Solutions raised $23 million in a third round of venture capital to take its long-suffering, frequently altered, outsourced data storage business to profitability.
The storage service provider landed the money at a reduced valuation to a $20 million April 2000 round of debt and equity but expects the money to carry it to cash flow positive status in the second quarter of 2002. Arsenal CEO Geoffrey Sinn said the money will likely be the company's final private round, though he said it is possible Arsenal may sell additional equity to strategic partners.
The round was led by Southeast Interactive Technology Funds and included Covestco, Task USA and MCNC, all of which participated in the previous round. J.P. Morgan also invested in the second round but opted out of the current funding.
"There were good reasons some investors didn't come back in; it wasn't because of a loss...