Coraid Closes $25 Million Series-B Investment

Coraid Inc. has closed a $25 million Series-B investment led by Menlo Ventures, one of the largest technology venture funds in the world with over $4 billion under management since inception. All of Coraid’s Series-A investors, including Allegis Capital and Azure Capital Partners, also participated in this round of funding.

With this round of funding, John W. Jarve, managing director of Menlo Ventures, is joining Coraid’s board of directors. Menlo Ventures was also the largest investor in 3PAR Inc., a leading global provider of Fibre Channel-based utility storage, which was recently acquired by HP for $2.35 billion. Other members of the Coraid Board of Directors include acclaimed entrepreneur and Chairman of the Board Audrey MacLean; Kevin Brown, CEO of Coraid; Brantley Coile, CTO and founder of Coraid; Bob Kavner, former CFO of AT&T and CEO of OnCommand Corporation; Pete Bodine, general partner at Allegis Capital; and Paul Weinstein, founding general partner at Azure Capital Partners.

"Menlo Ventures recognizes that Coraid has a tremendous opportunity to disrupt the storage market, and fundamentally redefine storage economics," said Jarve. "Cloud computing can’t reach its full potential without powerful storage, which is currently the most expensive and complex piece of the modern data center. Coraid’s innovative Ethernet SAN platform is already changing this equation for over 1,200 customers, eliminating the complexity and performance issues of legacy solutions."

"The technologies traditionally used to present disk storage to servers, Fibre Channel and iSCSI, grew out of the mainframe era and simply aren’t up to the job of supporting a cloud infrastructure," said Chairman of the Board Audrey MacLean. "The storage industry has finally admitted that Ethernet is the ultimate platform for storage networking, and Coraid has developed a huge technology lead over the past six years. We believe the addition of Menlo Ventures to the team and our Series-B investment highlight Coraid as a breakout company to watch in the storage market."

Coraid is redefining the economics of storage with Ethernet SAN solutions. Using Coraid’s CorOS software and Layer 2 Ethernet networking, EtherDrive storage arrays enable a scale-out SAN architecture that matches the agility of today’s virtualized server environments. Starting at under $500 per terabyte and scaling to multiple petabytes, EtherDrive delivers a five-to-eight times price performance advantage over legacy Fibre Channel and iSCSI solutions. An August 2010 study by ESG Lab validated that Coraid’s EtherDrive SRX-Series delivers faster performance than Fibre Channel at approximately 20 percent of the cost, with storage arrays that can be configured in less than two minutes.

"Just as virtualization and x86 processors transformed the server market, Ethernet and scale-out architectures are poised to transform the $25 billion storage market," said Kevin Brown, CEO of Coraid. "This Series-B investment positions Coraid for rapid growth in the coming years, and enables us to accelerate the development of new disruptive technologies. Most importantly, the new funding enables us to provide enterprise-class support to our customers worldwide, and help them take full advantage of Ethernet SAN technology."

Since raising its first $10 million round of Series-A funding in late 2009, Coraid has built out an experienced management team and achieved record growth. The company introduced its high-performance EtherDrive SRX-Series storage arrays and launched a worldwide partner network earlier this year, and recently announced its new on-site Coraid Zero-Hour Support offering for remediation of hardware failures.

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