High-end SSD Developer SolidFire Closes $31M C Round Led by Samsung
SolidFire, a developer of solid-state drive data storage technology, announced today that it has closed a $31 million Series C round. The investment brings the total of venture capital raised by the Boulder, CO-based startup to $68 million.
That’s not bad for a company that was formed in 2009 and only really began selling its drives last year, according to founder and CEO Dave Wright.
SolidFire’s all-flash memory SSD drives power data centers for service providers that offer public cloud services and for enterprise clients that have their own private cloud, Wright said. He believes SolidFire’s drives offer the best combination of size, speed, scalability, and performance of any data storage system on the market.
“We are now able to deliver both the largest and fastest all-solid-state storage system on the market by a good margin,” Wright said. “That’s extremely important for the markets we’re targeting, which is large public and private clouds.”
Size, speed, and performance are crucial to SolidFire’s corporate growth as well, and the $31 million will be used to build out the company’s worldwide sales and marketing forces as it tries to become the preeminent provider of SSD systems for large-scale cloud infrastructure.
“It’s really all about scale at this point,” Wright said. “We’re really raising this amount to give us a couple more years to continue to mature the company, grow our user base so we get to profitability, and position ourselves in a place to go public.”
Samsung Ventures, the investment arm of the giant Korean tech and electronics company, led the round and is a new investor. It joined existing investors New Enterprise Associates, Valhalla Partners, and Novak Biddle Venture Partners.
The funding announcement was timed to coincide with SolidFire’s latest product release. SolidFire is rolling out its third product, the SF9010, which it says is the largest and fastest all-SSD storage system on the market today. According to SolidFire, systems built around SF9010 can scale to effective capacity of 3.4 petabytes and can hit 7.5 million input/output operations per second (IOPS).
Aside from hitting new levels for performance and capacity, the product also crosses an important price threshold and now is less expensive at scale than high-speed systems that rely on traditional spinning disks, Wright said. SolidFire puts the price at $3 per gigabyte and less than $1 per IOPS.
“We’re not just able to be competitive, but actually less expensive. This is the first time we’ve seen solid-state storage at a very large scale be able to be less expensive than a disk-based system,” he said.
The Series C round and partnership with Samsung is important to SolidFire in a few ways, according to Wright. SolidFire wasn’t in fundraising mode, having closed a $25 million Series B round in December 2011. Samsung approached SolidFire with a preemptive offer for the round, he said.
SolidFire’s relationship with Samsung also goes beyond the investment. The new SF9010 system uses Samsung’s latest 960GB MLC datacenter-class drives. SolidFire’s other two systems are powered by drives from Intel (NASDAQ: INTC).
Samsung is the world’s largest maker of flash drives, and in the past week it released a 1 TB flash drive for the consumer market under the slogan of “SSD for everyone.” While SolidFire is at the other end of the SSD spectrum, it expects to benefit from Samsung’s global reach and market position, Wright said.
Wright said the ties with Samsung shouldn’t be seen as an indicator that SolidFire is setting itself up to be the latest innovative data storage company based in Colorado that’s gobbled up by a larger company.
“The strategy from the beginning has been to build a long-term, standalone company, and the Samsung investment and partnership really just expands our ability to do that. Honestly, if we were looking to sell the company, particularly if we were looking to sell it in short order, we wouldn’t be raising anywhere near this amount of money,” Wright said.
Wright’s already built one successful data storage company. He founded and was the CEO of Jungle Disk, which was acquired by Rackspace (NYSE: RAX) in 2008. The deal was concurrent with Rackspace’s purchase of Slicehost, and Rackspace said the two companies cost a combined $11.5 million. Wright left Rackspace to found SolidFire.
SolidFire’s on the right path, with product and corporate development tracking as planned, Wright said. SolidFire does not release revenue numbers, but it has been generating revenue for about a year. The next major milestone on the road to the hoped-for IPO is breakeven, he said.
But for now, it’s all about customer acquisition and scaling. SolidFire recently landed Colt Technology Services as a client. London-based Colt operates data centers in Europe and posted $2.1 billion in revenue in 2012.
SolidFire now has more than 100 employees, with about 80 based in Boulder. The company’s headcount could jump by 50 to 100 percent in the next year as it expands the U.S. and international sales teams, Wright said.
Their mission will be to help sell SolidFire into a segment of the data storage market that could grow to $8 billion in three or four years, Wright said.