Pure Storage Closes Huge $150 Million Funding Round
Total at $245 million, on track for IPO
This is a Press Release edited by StorageNewsletter.com on August 30, 2013 at 2:53 pmPure Storage, Inc. has closed an oversubscribed $150 million series E funding round with institutional investors – the single largest private funding in the history of the enterprise storage industry.
Led by T. Rowe Price Associates, Inc., Tiger Global Management LLC and other public market investors, with participation by its previous venture capital investors Greylock Partners, Index Ventures, Redpoint Ventures, Samsung Ventures Investment Corporation and Sutter Hill Ventures, the new funding brings the company’s total capital raise to $245 million and puts the all-flash storage pioneer on-track for a future IPO.
Pure Storage will use the new funding to accelerate continued expansion of its European and Asia-based operations, grow its sales, support and marketing teams worldwide, and increase its investments in R&D.
Pure Storage also announced that former Data Domain CEO Frank Slootman has joined its board of directors. A veteran of the enterprise storage and software industries, he was one of the company’s earliest supporters and angel investors, which also include VMware’s cofounders former CEO Diane Green and former CTO Mendel Rosenblum. Slootman guided Data Domain from its market entry through IPO and currently serves as CEO of ServiceNow. He will now take a more hands-on role with Pure Storage, as a key strategic advisor.
"Pure Storage is experiencing much of what we did at Data Domain," said Slootman. "They’re replacing one storage media (disk) with another (flash). They pioneered the use of inline data reduction to remove the cost hurdle for the media upgrade, and, as a result of being the first to get this right they are growing about as fast as companies can grow organically. I am glad to be able to offer my own perspective in driving and managing growth to the top tier board of directors and leadership team at Pure."
Becoming Fastest Growing Storage Company In History
Emerging from stealth two years ago with a vision to disrupt the incumbent status quo, Pure Storage has rocked the storage industry with its approach that combines proprietary data deduplication and compression technologies with affordable MLC flash memory to deliver an enterprise all-flash storage array for less than the cost of mechanical disk. In the process, the company has pioneered a thriving new market category and set a new industry standard for enterprise storage excellence.
"We are very selective in the private companies that we choose to invest in," said Henry Ellenbogen of T. Rowe Price. "In our view, Pure represents a rare combination of disruptive innovation, strong leadership, and strong growth. In particular, customer references were excellent. We look forward to working with Pure as they scale and strive toward becoming a public company."
Since releasing its flagship FlashArray to availability in 2012, Pure Storage has achieved over 50% consecutive quarterly growth, surpassing previous industry growth benchmarks set by NetApp and Data Domain to make it the fastest growing storage company in the industry’s history.
Now, with hundreds of units shipped and its third generation FlashArray GA in production across a diverse global customer install base, the company is democratizing enterprise storage and delivering on its promise of ‘Flash for All’: flash for all enterprise applications and performance workloads, flash for all industries, and flash for all customer sizes and budgets.
"Paylocity’s mission is to help our clients move from the backroom to the boardroom. To achieve this, we rely on the most advanced, best of breed technologies available to deliver a truly seamless and transformative solution for our customers," said Brian Palmer, VP of Information Technology at Paylocity. "Our modern, fully virtualized data center architecture used to rely on disk-based storage solutions. Utilizing the Pure Storage FlashArray, we have converted our systems and become an all-flash enterprise. The benefits and efficiencies have been immediate and tangible: we have realized 8x gains in performance, 5x reduction in data center space and 8x reduction in power, which has enabled us to deliver a vastly improved end-user experience."
Increasing Global Demand for Flash
Accelerates Rapid Growth, Fuels International Expansion
Accelerated global demand for FlashArray has also driven expansion of Pure Storage’s international go-to-market efforts. In the first half of 2013 alone, the company established new bases of operations in more than 10 countries across three continents, including United Kingdom, Netherlands, Norway, South Africa, Denmark, Poland, Germany, Japan, Korea, Australia and Singapore.
Pure Storage has remained resolute in its commitment to a channel-devoted sales strategy. In just over a full year of channel operations, the company has achieved more than 125% consecutive quarter-over-quarter channel growth, establishing strategic partnerships in key EMEA and APAC markets. Partners include: Softcat in the UK, AntemetA in France, Observatory Crest in Australia, EmFrontier in Korea, and Tokyo Electron Device Limited in Japan. Pure Storage also recently announced a strategic investment and technology development agreement with In-Q-Tel, a private investment firm serving the U.S. Intelligence Community, giving it a significant foothold in the federal sector.
"In 2009, we set out to build the next great storage company," said Scott Dietzen, CEO, Pure Storage. "Today, we are taking our most significant step yet toward realizing that goal. This landmark financing reinforces our position as the frontrunner in leading the transition from mechanical disk to flash memory in the data center – perhaps this decade’s most significant IT disruption. We are thrilled to have the strategic guidance of Frank Slootman and world-class public market investors, like T. Rowe Price and Tiger Global among others, to support us in this mission. 2013 has already proven to be an auspicious year for Pure Storage, with record growth on all fronts and our recipe for all-flash storage at the price of disk anointed us as the one to which our competitors aspire. Fortified by this pre-IPO funding round, we will continue to accelerate our global business. Expect even bigger things from Pure in the months and years to come."
Allen & Company LLC served as Pure Storage’s financial adviser and assisted in the closing and terms arrangements of this funding round.
Comments
Here we begin to analyze two official statements of Pure Storage in the press release above.
"the single largest private funding
in the history of the enterprise storage industry"
$150 million in one funding round is a massive amount but there was at least one higher round received by a storage company, $250 million in October 2011 in series B by Dropbox, a cloud backup company, also for enterprises.
"the fastest growing storage company
in the industry's history"
Pure Storage said it achieved over 50% consecutive quarterly growth - how much exactly? for which quarter? - but some other storage companies record probably higher growth like Altaro, StorMagic, Tintri or Veeam Software. The problem here is that most of start-ups do not reveal precise figures on their revenue - as well as Pure Storage - and we don't know how it can affirm such a world record.
We think Pure Storage is a great company with a questionable marcom team.
Among the 32 firms in all-ssd storage subsystems, Pure Storage has an excellent offering to compete with some other start-ups and storage giants EMC, HDS, HP, IBM or NetApp.
Gartner estimates that Violin Memory was the leader in flash-based storage array in 2012 in front of EMC (16%), IBM (15%), NetApp (11%), HDS (7%), Nimbus Data (6%) ... and Pure Storage (6%) with revenue of $21 million, for a global worldwide market at $371 million.
The flash start-up is looking for an IPO and estimated its value at over $1 billion. But its last massive round means that it needs money and is probably not yet profitable.
Now Pure Storage has raised a total of $245 million, former round being $5 million in 2009, $20 million in 2010, $30 million in 2011, and $40 million in 2012.
$245 million by Pure Storage is not a record in total financial funding for a storage start-up. Dropbox got $257.2 million up to now, Box.net $262 million. On top of that, Pillar Data Systems raised approximately $544 million before being acquired by Oracle in 2011.
Subscribe to our free daily newsletter
