DataCore

Storage Start-Ups in 2012

Innovation never stopping in industry, 67 new rounds last year
By Jean-Jacques Maleval on 2013.02.13

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In 2012, we counted 67 investment rounds initiated by storage start-ups, a good number.

It was 62 in 2011 and 68 in 2010, a stable figure but far from the record of 76 and 77 in 2004 and 2005, respectively. This small increase last year is not bad news for storage, still one of the most dynamic sectors in the IT industry, continuing to be appreciated by VCs that dream of what some of them got following the acquisitions of firms like 3par, Data Domain and Isilon few years ago at more than $2 billion.

But the investors in these latter three start-ups were lucky as generally most of them have to invest in several new ventures to finally win the jackpot.

Already five new rounds have been registered in 2013.

NUMBER OF FINANCIAL ROUNDS
SINCE 2003

 YEAR
 ≠
2003  56
 2004  76
 2005  77
 2006  66
 2007  64
 2008  54
 2009  56
 2010  68
 2011  62
 2012  67

statrtups_2012_each_year_540

Fewer New Start-Ups
More worrying is the reduced number of start-ups founded since the heydeys of 2000 when 96 new entities sprang up in a single year. We were only able to turn up 11 new firms launched last year vs. 21 in 2011 and 34 in 2010, while these figures will go up as more of them, operating in stealth mode, come to light.

NUMBER OF STORAGE START-UPS
LAUNCHED EACH YEAR SINCE 1996

 YEAR
 ≠
 1996  13
 1997  13
 1998  32
 1999  57
 2000  96
 2001  60
 2002  51
 2003  50
 2004  39
 2005  41
 2006  33
 2007  47
 2008  38
 2009  29
 2010  34
 2011  21
 2012  11

startups_2012_per_year_der_540

How Much Do They Raise?
27 firms raised more than $20 million in 2011 (16 in 2011 and 9 in 2010). Box.net tops the list with with $125 million. Last year the records were $250 million for Dropbox and $129 million for Box.net, both of them in cloud storage. Per comparison, the largest round was only $45 million in 2010, for Fusion-io. Cloud was really exciting the investors last year as well as SSD technology and this trend will continue.

If we take into account here the total funding of start-ups, all rounds aggregated, Pillar Data was the most financed company, with $544 million from Larry Ellison, CEO of Oracle that finally acquires the storage subsystem provider. After that comes Dropbox with $257 million and BlueArc (acquired by HDS) with $224 million.

LARGEST FINANCIAL ROUNDS IN 2012
At more than $20 million

COMPANY $ MILLION
Box.net 125
Violin Memory 80
Cloudera 65
Mimecast 62.2
Code 42 Software 52.5
WhipTail Technologies 41*
Nimble Storage 40.7
PURE Storage 40
Spin Transfer Technologies 36
Nutanix 33
Avalanche Technology 30
Diablo Technologies 28
Virtual Instruments 27.5
Qumulo 26.8*
Virident Systems 26
DensBits Technologies 25
Kaminario 25
Nirvanix 25
SimpliVity 25*
Tintri 25
Pivot3 23
Exablox 22*
Nexenta Systems 21
Crossbar 20.5
Avere Systems 20
Nasuni 20
Solera Networks 20

* in two rounds in 2012

Record Year in Financial Funding
2012 was another record year since 2003 in the global amount received by storage start-ups considering here only the sums revealed by the companies: $1.340 billion invested or an average of $20.0 million per round (when a firm got two rounds the same year, we consider them as one round), a figure increasing by 13% from 2011.

These past ten years, VCs have put $15.9 billion in storage start-ups. This amount is about twice the total figure in the table below ($8.854 billion adding all rounds) because, for several firms, we got the total invested but not the details per round.

On average, a company got $38.8 million in total funding, the average per round being $13.2 million.

   ≠ OFROUNDS  TOTAL
INVESTED*
 AVERAGE
PER ROUND*
2003
 56  $716  $12.8
2004  76  $979  $12.9
2005
 77  $990  $12.9
2006
 66  $777  $11.8
2007
 64  $734  $11.5
2008
 54  $710  $13.1
2009
 56  $576  $10.3
2010
 68  $846  $12.4
2011
 32  $1,186  $19.1
2012  67  $1,340  $20.0
TOTAL
 646
 $8,854  $13.7

* in $ million

Where From?
It will come as a surprise to no one that storage start-ups are for the most part (around three-fourths of the total) headquartered in the U.S., even if occasionally the actual founders hail from another country originally (typically India or Israel). Far behind are France, UK, Canada and Israel. Apart America and Europe, the two other continents, Asia and Oceania, are not well represented at all.

WHICH COUNTRIES DO THEY COME FROM?
(out of 388 active start-ups)

COUNTRY

   %
USA  283 73%
France   18    5%
UK   16    4%
Canada   12    3%
Israel   11    3%
Others   48   12%
TOTAL  388  100%

Where Are They Going?
The last thing we looked at was what becomes of all these storage start-ups after we identify and count them? The conclusion is not really reassuring, a reminder that investment in these sorts of companies is in fact highly risky. And that's just taking those we know about.

On all start-ups identified, only 3% eventually go public, and thus allow investors more than just to recoup their original stake. The same is generally true for the 28% that find buyers, although the asking price is not always greater than the total of all sunk investments. It is, in any case, the emergency exit that most companies are seeking, certainly more than the increasingly elusive IPO. Meanwhile, another 18% just vanish off the map - doors closed.

More than half (51%) remain in a holding pattern, still a start-up, still nursing the secret hope of an offer from a storage giant seeking to fill-in a missing technology.

WHAT HAPPENED TO THEM SINCE 1978
(out of a total 749 start-ups)

Became public   23   3%
Sold  211  28%
Closed  136  18%
Remaining start-ups  388  51%

Note: Total is more than 749 become some of them became public and/or were closed and and/or were sold.

18 start-ups did find buyers in 2011 and 21 in 2012, the biggest deal last year being XtremIO for $430 million, this one and several others around SSDs.

START-UPS ACQUIRED IN 2012

ACQUIRED START-UP
 BUYER
 PRICE*  TOTAL
FUNDING*
AppAssure Software  Dell  NA  NA
Cache IQ  NetApp  NA  6
Cofio Software  HDS  NA  2
Doyenz  Persistent
Systems
 NA  NA
Expand Networks  Riverbed  10  82.5
FlashSoft  SanDisk  NA  3
Likewise Software  EMC/Isilon  NA  27
Link_A_Media Devices  SK hynix  NA  56
Nevex Virtual Technologies  Intel  NA  NA
NVELO  Samsung  NA  6.6
Sanrad  OCZ Technology  15  29
Schooner Information Technology  SanDisk  NA  35
StoredIQ  IBM  NA  24
StorSimple  Microsoft  NA  31.5
Syncplicity  EMC  NA  2.6
Unity Semiconductor  Rambus  35  75
Virtensys  Micron  NA  40
Whamcloud  Intel  NA  10
Xsigo Systems  Oracle  NA  NA
XtremIO  EMC  430  25
Zmanda  Carbonite  15  13

*in $ million

NEW START-UPS (known thus far) BORN IN 2011 ...

COMPANY ACTIVITY AND COMMENTS
AeroFS (Palo Alto, CA) software for peer-to-peer file system to
automatically sync between your personal computer and anyone you invite to
share stuff with
Assurance Storage (Louisville, CO) caching software for SSDs; acquired the assets of
Atrato
Averail (San Jose, CA) mobile document solution for enterprise; in stealth
mode
Backify (Vancouver, BC) online backup; self-funded by founder Tarandeep
Gill; born in 2011; closed in 2011
Bitcasa (Cincinnati, OH) infinite online backup storage for desktop PCs
doo GmbH (Bonn, Germany) cloud-based service that collects documents from
multiple sources for archiving
Infinidat (Herzliya, Israel) in stealth mode; apparently born in 2011; probably
Dr. Alex Winokur involved
infinite.io (Paris France) peer-to-peer software which enables users to access
all their data from any of their computing devices
Kanbox (Beijing, China) online backup in China
Lunabee Studio (Le Bourget du Lac, France) oneSage to secure data of iPhone and iPad; also in
Singapore
Maldivica (Atlanta, GA) virtual appliance that makes cloud storage appears
as NAS
Nakivo (Campbell, CA) VM backup and replication for small business
ownCloud (Lexington, MA) open source file sharing
Proton Digital Systems (San Jose, CA) flash read channel
Proximal Data (SanDiego, CA) virtual cache software for unified I/O caching
across multiple VMs
Raidundant (Los Angeles, CA) ruggedized box with removable RAID and connector; no
CEO
ScaleIO (Palo Alto, CA) software using application hosts' local disks to
realize virtual SAN
StorPool (Sofia, Bulgaria) software managing distributed disk arrays and
consolidating them into single shared storage
SurDoc (Menlo Park, CA) document processing and online backup
Syylex (Villingen-Schwenningen, Germany) archiving glass-based optical disc
Zadara Storage (Nesher, Israel) NAS as a service in cloud; also in Irvine, CA

... BORN IN 2012

COMPANY ACTIVITY AND COMMENTS
Akonia Holographics (Longmont, CO) holography, disc and drive, founded by former people
from InPhase Technologies
Cobalt Iron (Lawrence, KS) enterprise local and cloud backup
DataGravity (Nashua, NH) launched by EqualLogic veterans; in stealth mode
DEY Storage Systems (San Mateo, CA) software defined storage: virtualized storage OS on standard hardware for data-center scale customers
Folio Photonics (Cleveland, OH) optical disc holding 1TB or 2TB
hVault (Boulder, CO) holographic disk storage system based on InPhase
Technologies' patents
Inktank (Sunnyvale, CA) professional services and support subscriptions
around Ceph
Peaxy (San Jose, CA) storage and management software
PernixData (San Jose, CA) in stealth mode; platform for the next generation
software-defined datacenter
Qumulo (Seattle, WA) in stealth mode; seed funding of $2.3 million and
series A $24.5  million in 2012
Starboard Storage Systems (Broomfield, CO) born after the closing of RELDATA; series B in 2012
Zadara Storage (Irvine, CA)* software defined storage as a service for public and private clouds (NAS and SAN); also in Nesher, Israel

* Correction on February 14, 2013

ALL FINANCIAL ROUNDS IN 2012

NAME (HQ) BORN IN 2012 FUNDING TOTAL FUNDING ACTIVITY AND COMMENTS
Active Circle (Jouy en Josas, France) 2002 2 15 software for grid environment with storage cell;
founded by former Quadratec/Atempo employees
Akonia Holographics (Longmont, CO) 2012 10.8 NA holography, disc and drive, founded by former people
from InPhase Technologies
Albiquo (Bracknell, Berkshire,UK) 2006 3 NA cloud software platform for enterprise and service
providers
Amplidata (Lochristi, Belgium) 2008 8 20 RAID by storing data across a selection of disks;
two rounds in 2010, $2.5 million and then $6 million
Astute Networks (San Diego, CA) 2000 12 49.8 IP storage processor; unknown investment from
Tallwood Venture Capital in 2010
Avalanche Technology (Fremont, CA) 2006 30 NA low power non-volatile magnetic memory; in stealth
mode
Avere Systems (Pittsburgh, PA) 2008 20 52 tiered NAS appliances
Backblaze (San Mateo, CA) 2007 5 NA online backup
Backupify (Cambridge, MA) 2008 9 19.5 online backup company with data stored on the Amazon
S3 cloud
Bitcasa (Cincinnati, OH) 2011 7 9 infinite online backup storage for desktop PCs
Box.net (Palo Alto, CA) 2005 125 262 online storage on the Web; partners with Dell; two
rounds in 2011: $48 million and $81 million
CloudByte (San Mateo, CA) 2010 2.1 2.1 storage controller to manage physical or virtual
storage; engineering team based in Bangalore, India
Cloudera (Palo Alto, CA) 2008 65 141 Apache Hadoop-based platform; two rounds in 2009 at
$5 million and then $6 million
CloudVelocity (Santa Clara, CA) NA 5 5 hybrid cloud platform with server, networking,
security and storage integration with AWS; formerly Denali Systems
Code 42 Software (Minneapolis, MN) 2001 52.5 70.5 offsite and online backup solutions
Convergent.io (San Jose, CA) NA 10 10 software-defined storage networking; founded by
XenSource veterans
Crossbar (Santa Clara, CA) 2008 20.5 NA apparently in memory to replace flash
CTERA Networks (Petach Tikva, Israel) 2008 15 NA Cloud Attached Storage grouping small NAS into a
single appliance; first financial round in 2009; investment round in 2012
(probably around $15 million); also in Palo Alto, CA
DataGravity (Nashua, NH) 2012 12 42 launched by EqualLogic veterans; in stealth mode
DensBits Technologies (Haifa, Israel) 2007 25 40-50 Memory Modem technology enables cost reduction in
NAND flash-based storage systems; series B funding in 2012
DEY Storage Systems (San Mateo, CA) 2012 3 3 open storage virtualization software based on
Illumos/ZFS
Diablo Technologies (Ottawa, ONT) 2003 28 NA software and hardware architecture with non-volatile
memory for solid state storage for enterprise
doo GmbH (Bonn, Germany) 2011 10 10 cloud-based service that collects documents from
multiple sources for archiving
Egnyte (Mountain View, CA) 2007 16 35 cloud storage (online file server)
Exablox (Mountain View, CA) 2010 22 NA apparently appliance with file system more robust
than ZFS; formerly Oneblox; in stealth mode; got $2 million in 2011; $22
million in two rounds A and B in 2012
FileTrek Software (Ottawa, Canada) 2001 10 16 cloud-based file sharing solution that tracks and
audits enterprise content and data; formerly Gridiron Software and until 2012
GreenBytes (Providence, RI) 2007 12 NA VDI/desktop virtualization
Gridstore (Dublin, Ireland) 2007 12.5 15 NAS grid solutions
Inktank (Sunnyvale, CA) 2012 1 NA professional services and support subscriptions
around Ceph
Intronis (Boston, MA) 2003 12 17 online backup provider
Kaminario (Newton, MA) 2008 25 70 very fast SAN with blade appliance based on DRAM and
backup on HDDs; R&D in Israel
Mimecast (London, UK) 2003 62.15 83 email management including archiving, discovery,
continuity, security and policy
Nantero (Woburn, MA) 2001 10 41.5 nonvolatile RAM memory; $10.5 million in 2003 in a
second round
Nasuni (Natick, MA) 2009 20 43 secure cloud storage; founded by former executives
of Archivas
Nexenta Systems (Santa Clara, CA) 2005 21 30 software storage OS based on Linux and ZFS
NextIO (Austin, TX) 2003 12.3 74.8 PCIe I/O virtualization solution
Nimble Storage (San Jose, CA) 2008 40.7 98.7 storage, backup, and DR into a single iSCSI solution
with SSDs and HDDs
Nirvanix (San Diego, CA) 2007 25 70 online storage services optimized for media;
spin-off company from MediaMax
nScaled (San Francisco, CA) 2009 7 NA online backup and IT DR solution for BC; formerly
LegalCloud; VC funding in 2010
Nutanix (Santa Clara, CA) 2009 33 71.5 cloud computing and virtualization
ownCloud (Lexington, MA) 2011 2.5 3.75 open source file sharing
Panzura (San Jose, CA) 2008 15 33 software and hardware for cloud storage as tier one
Peaxy (San Jose, CA) 2012 2.5 2.5 storage and management software
Pivot3 (Austin, TX) 2003 23 100.5 RAID Across Independent Gigabit Ethernet (RAIGE) for
video surveillance
PURE Storage (Mountain View, CA) 2009 40 95 all-flash storage arrays
Qumulo (Seattle, WA) 2012 26.8 26.8 in stealth mode; seed funding of $2.3 million and
series A $24.5 million in 2012
QVIVO (Hong Kong) 2010 1 1 provider of cloud storage
RainStor (San Francisco, CA) 2004 12 23.5 online information preservation; trading name of
venture-backed private company Clearpace Software;  engineering team in UK
Scale Computing (Indianapolis, IN) 2008 12 43 clustered disk-storage solution for SMBs; $9 million
and $17 million rounds in 2010
ScaleIO (Palo Alto, CA) 2011 15 NA software using application hosts' local disks to
realize virtual SAN
SimpliVity (Westborough, MA) 2009 25 43 2U box platform to manage virtualized
infrastructure; formerly Ecological Solution; two rounds in 2012, $6 million
and $18 million?; third one same year series B at $25 million
Skyera (San Jose, CA) 2010 6 6 enterprise solid-state storage controllers; formerly
StorCoud
SnapVolumes (Los Altos, CA) 2010 2.3 NA application lifecycle management in virtual, cloud
and physical environments
Solera Networks (Salt Lake City, UT) 2004 20 NA stream-to-disk technology; appliance providing
entire views of historical and real-time network traffic
Sonian (Newwton, MA) Sonian Sonian
(Needham, MA-
2006 13.6 28.2 SaaS hosted archive solution with grid computing
infrastructure technologies; acquired Webroot's email archiving business in
2012
Spin Transfer Technologies (Boston, MA) 2007 36 36 orthogonal spin transfer magnetoresistive random
access memory technology; subsidiary of Allied Minds: born in 2007?
Starboard Storage Systems (Broomfield, CO) 2012 13 NA born after the closing of RELDATA; series B in 2012
SugarSync (San Mateo, CA) 2008 15 60 service that syncs files across all computers and
devices; two rounds in 2012: $15 million (D series) and $10 million
SwiftTest (Santa Clara, CA) 2008 7.25 NA networked storage testing; series B in 2012
Symform (Seattle, WA) 2007 13 20 Cooperative Storage Cloud to utilize existing
capacity at their customer sites to extend on-site backup solutions; two
rounds in 2012: $2 million and $11 million
Terascala (Avon, MA) 2005 14 17 founded by former execs Larry Genovesi and Bill
Elliot of Network Engines; in computer and storage blades for Unix cluster;
partnership with HP in 2010
Tintri (Mountain View, CA) 2008 25 60 purpose-built SSD storage system for virtual
machines; two rounds in 2011: $17 million (A,B) and then $18 million (C)
VideoIQ (Bedford, MA) 2004 3.5 35 video surveillance and storage; two rounds in 2011:
$6 million and $7.5 million (series C)
Violin Memory (Mountain View, CA) 2005 80 186 flash memory arrays; $35 million and then $40
million raised in 2011; acquired GridIron Systems in 2012
Virident Systems (Milpitas, CA) 2006 26 76 enterprise PCIe SSD; also in Bangalore, India:
second round in 2010; Seagate put $40 million in the company in 2013
Virtual Instruments (San Jose, CA) 2008 27.5 65.5 virtual infrastructure optimization solutions;
spin-out from Finisar
WhipTail Technologies (Summit, NJ) 2007 41 NA SSD arrays; series A round in 2011; $10 million
series B and $31 million series C in 2012
Zadara Storage (Irvine, CA)* 2011  7  7 software defined storage as a service for public and private clouds (NAS and SAN); also in Nesher, Israel

* Correction on February 14, 2013

 

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