The Open Source application server company added $16 million to $12.5 million the company raised in two earlier rounds dating back to January 1998.

Investors in the Series C financing include return investors Chase Capital, Chase H&Q Partners, and the Intel 64 Fund, as well as new partners Compaq, NEC, and Deutsche Banc Alex. Brown.

The privately held company will use the new cash to fund operations and hire new staff, said Yancy Lind, president and CEO, but the investments will also allow Lutris to work on expanding its market.

With the investment by Compaq, Lutris becomes a member of the Compaq Solutions Alliance, meaning that the companies will work together to certify Lutris’ Enhydra product on the Compaq ProLiant, Alpha, and Tru64 platforms.

The two companies are also looking at offering joint conferences and working on joint marketing campaigns to promote the Lutris Enhydra Open Source Internet Application Server with Compaq.

“We are looking to quickly penetrate new and existing markets,” said Lind. “We will use this investment to expand our product and services availability in key global markets. The combination of the newly formed relationships and the additional funding will help Lutris move aggressively to meet our goals.”

Lutris’ Enhydra, which costs $99 for the “Standard” version and $499 for “Professional,” is a set of application server products used to build Web and wireless applications for clients ranging from dot-com startups to Fortune 500 companies. About 100,000 clients use Enhydra, according to Lind.

Lutris also offers consulting and support services for its products. “Behind that product is a company,” said Gillian Webster, Lutris’ vice president of worldwide marketing.

Among the company’s strategic goals are expansion into the Japanese market, made easier with the partnership with the Japan-based NEC. The company will also use the new investments to continue development of wireless and Java/XML capabilities.

The investments show that large corporations and investment houses have faith in the Open Source business model, Lind said. “The trend is clearly that Open Source has become a recognized development methodology,” he added. “People very clearly understand the power and value of Open Source, and they understand that Open Source is more than just Linux.”

Added Steve Garone, program vice president for application development and deployment at technology analyst IDC: “The interest paid to Lutris Technologies by the investment community is important validation that a successful and sustainable business can be built on an Open Source model. Lutris has executed on the promises to introduce tested, certified, and commercial-level products and to build the necessary customer service organization to support the technology. This round of investment can be seen as a vote of confidence that Lutris is well-positioned to continue its growth in the application server and professional services industries.”

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