Virtual Computer raises $15 million and makes a new friend in the industry

Virtual Computer raises a large round of Series B funding in this down economy, $15 million. And they also form a relationship with Citrix at the same time.

Virtual Computer, a PC virtualization startup that came out of stealth mode last fall, today announced that it has raised a total of $15 million with its Series B round of funding. The round was led by Highland Capital Partners and Flybridge Capital Partners who put up the company's $6 million Series A round a year ago. An investment of $15 million in this economic environment is a big deal and should prove to be a feather in Virtual Computer's cap.

But even more interesting news was that the company not only had its current investors show their continued support by reinvesting, but that they had also received a new strategic investor in the new funding round -- Citrix Systems.

So why is Citrix investing in Virtual Computer so interesting? For one, Citrix also just recently unveiled its own partnership announcement with Intel. And even more interesting, they also announced their own plans to create a client hypervisor solution with Project Independence. One would assume that Virtual Computer is safe from any competition with this new project.

"We've been watching Virtual Computer since their company launch in September 2008," said Andy Cohen, senior director, strategic development at Citrix Systems. "We see great synergy between their use of Xen technology for PC lifecycle management and Project Independence, our recently-announced initiative to dramatically change the economics of desktop computing by enabling devices, desktops, applications and people to operate more independently through the power of client-side Xen virtualization. We look forward to working with Virtual Computer in a mutually beneficial capacity and see our investment as the first step in that direction."

The company is building a virtualization program called the NxTop Engine that installs on laptop or desktop hard drives and runs below the level of the usual Windows operating system. They are also building their own management system called NxTop Center that can, according to the company, make it as easy to manage thousands of PCs as it is to manage one, dramatically reducing PC management costs while improving PC reliability and security.

The company believes this approach has several advantages over traditional PC management, server hosted VDI and existing client side virtualization solutions. It provides the same level of management and security of VDI without a costly data center and network upgrade, hosted desktops can only handle about 20 to 30 users simultaneously, hosted systems don't account for mobile/laptop users, and client OS hosted virtual desktops have less than adequate performance.

The $15 million Series B round should allow NxTop's development to keep moving forward, and at the same time, the company said that it would use the money to accelerate its global sales and marketing efforts.