Sequoia, Greylock Take Stake In OpenDNS

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It isn’t the sexiest startup in Silicon Valley, but San Francisco based OpenDNS just closed one of the most competitive venture capital deals in recent history. Top tier firms Sequoia Capital and Greylock Partners came out the winners. The company will announce a second round of financing from both firms shortly.

The deal size and valuation isn’t being disclosed. David Strohm from Greylock and Michael Goguen from Sequoia join previous investor Halsey Minor and CEO Nand Mulchandani on the board of directors. Founding CEO David Ulevitch stepped down in late 2008 to take the CTO role.

OpenDNS, which launched in 2006, is a DNS service provider for consumers and organizations. It has two main benefits. First, users can avoid DNS outages that occasionally plague ISPs because OpenDNS routes around the legacy infrastructure that occasionally gets hit by DDOS attacks and other problems. Last year, for example, a Time Warner outage left many Los Angeles customers without Internet access, but OpenDNS users weren’t affected.

The service also allows users to block certain kinds of sites, like porn and phishing sites. Users have to do some basic configuration of their computer to get it going, and once it’s running they rarely see it again.

A year ago we reported that the company was resolving 7 billion DNS queries per day and revenue from search pages from unresolved URLs brought in as much as $20,000 per day. Today they are resolving up to 15 billion daily DNS queries.

The company has 24 employees and previously raised just $2.5 million from Minor Ventures. They have been profitable for more than 18 months, they say.

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