Scality Raises $22 Million in Third Funding Round

Scality, Inc.
has closed its series C funding round for $22 million,
bringing the total invested since company inception to $35 million.

The round was led by Menlo
Ventures and Iris Capital
with participation from FSN PME and all existing investors, including
Idinvest
Partners,
OMNES
Capital
and Galileo
Partners.
The
company
will use the funding to strengthen its worldwide sales and
marketing initiatives targeting enterprise and service provider
markets, and to increase investment in its R&D team.

"The
growth opportunity in the software storage market is very exciting
for us,"
said Doug Carlisle, MD, Menlo Ventures. "The
intersection of Mobile, Social, Big Data and Cloud Infrastructure is
creating a disruption in technology innovation. Scality is leading
the disruption in software defined storage technology. Since its
introduction in 2010, Scality’s RING software storage product has
seen rapid adoption by companies eager to try a new storage approach.
We look forward to watching Scality continue to innovate in data
storage solutions for the web scale infrastructure markets."

The
company has seen growth in customer adoption, achieving 400% sales
growth year over year. Customers deploy the
software to provide large-scale storage for cloud,
big
data,
and backup
and archive
applications. The customer list includes four of the top ten cable
operators in the US, the second largest telco in France, leading
portals in Italy, Germany, and UK, and several mobile operators in
Japan. More recently, Scality announced its entry in the media
and entertainment
market, and just signed RTL, the second largest media group in Europe
for its VOD
offering.

"We
have watched Scality grow since 2010, and their progress has been
exceptional,"
said Guillaume Meulle, partner, Iris Capital. "We
are delighted to participate in this funding round and to contribute
our experience of the Service Provider market, as well as our strong
ties with Orange and Publicis to help Scality build upon its current
success."

"Our
investors are a perfect match for the DNA of the company: they share
our vision for the future of data storage and they understand the
global market place."
said Jerome Lecat, CEO, Scality. "I
have managed several start-ups, but it is the first time I have seen
a 5x sales growth on an annual basis. A disruption is happening in
the market and we are driving it. This is very exciting. We are going
to continue growing and are recruiting to sustain this growth
including increasing our investment in R&D."

Comments

By Corentin Béchade, Redactor, StorageNewsLetter.com

This funding round is a milestone for the company. It's the biggest one since the company's inception in 2010 after $5 million in 2010 and $7 million in 2011. It's also the first investment from a US-based VC, Menlo Ventures.

The amount of money and the source from which it came from are important sign of trust for a company with entire R&D team located in Paris, France, and a strong foot in San Francisco, CA.

Existing investors Omnes, Galileo, Idinvest and CEO Jérôme Lecat re-invested in the round - he puts a total of $1.5 million into his company since its inception and continues to keep the control of Scality up to now. Giorgio Regni, CTO of Scality, joins the board, as well as Menlo and Iris.

These new $22 million - the initial $15 milion round was oversubscribed - are both a sign of the steady development of the company and a bet on the future for the new investors.

These funds are going to be invested in four major sectors:

The continuous investment in R&D resulting in more services centered around its RING software storage solution, the support for more protocol (NFS and CIFS coming in August) and more application integration

The focus on core market and geographies meaning that it is going to continue to develop cloud, big data and archive solutions for the US, Western Europe and Japanese market

The research for more alliances and OEM to keep on offering solutions with different partners and maybe in new countries

Investment in people: As of today the company employ 57 people, 7 of those being hired since the beginning of the year. The plan is to reach 70 people by the end of the 2013 and 100 people at the end of next year. Scality is looking to build a 'Qualty Insurance Team' and to hire senior management for the positions of VP WW sales, VP marketing and CFO.

Scality needed more money to finance its growth and now we are waiting to see when the start-up will be profitable for an eventual IPO. In the mean time, it could find a buyer. That's the two possibilities all the investors into any young firms are hoping.

A lot of French storage start-ups failed to succeed in the past. Last victim was Synerway. Will be Scality an exception? Arkeia was recently lucky to find a buyer (WD).

Other Alive French Start-Ups*

Company

Total financial funding**

Active Circle

ASP64

0.4

Crocus Technology

45.65

Kiwi Backup

0.02

Matrix Appliances

0.2

Oodrive

16.7

*Only those getting known financial funding
** in $ million

Read also:
Cool Vendors in Storage Technologies, 2013 - Gartner
Ctera, Delphix, Panzura, Pure Storage and Scality