Maxta Closing Doors?

Maxta, Inc. closed doors, according to The Register, being unable to get new funding and to find an acquirer up to now.

We went yesterday to Maxta HQ in Santa Clara, CA, and we saw a few interesting things: company doors were open (no more badge needed), just a few people, ’empty’ atmosphere and the reception was occupied by uncommon people as we recognized some of them. So we have an idea based on recent market move.

As DDN seems to attack HCI/virtualization segment with the Tintri (NAS for VMs with file SDS) acquisition a few months ago, we anticipate a second move for DDN with Maxta at a good price again still for a file SDS as Maxta exposes a NFS datastore. If this move is confirmed, it will strengthen DDN in that segment with two strong technologies.

Except a few players who seem to be in the positive curve like Microsoft, Dell EMC, Huawei, VMware, Nutanix, Datrium, Scale Computing or Pivot3, many others had some sort of difficulties that fit perfectly holes at some other vendors. Remember SimpliVity acquisition by HPE in 2017 for $650 million, SpringPath by Cisco also in 2017, Tintri asset acquired by DDN in 2018 or GridStore or Atlantis Computing difficulties. IBM is absent but Red Hat promotes an approach with Gluster and KVM so IBM will probably extend and package these. Two others ISV exist as well, StorMagic and StarWind.

HCI seems to be a tough market that consumes so far $1.4 billion in VC money by 12 companies but like other market category it turns out that it exists too many players thus consolidation and bankruptcy are inevitable.

For Maxta, founded 10 years ago in 2009, raised $35 million in two rounds, $10 million in 2011 and $25 million in 2014, Intel Capital being one of the investors. The profitability was an unreachable goal especially with this low amount raised. It reminds a few other stories where companies had some difficulties to raise a new round. It’s a shame, Maxta technology was (is) well respected but every story is different without any guarantee based on the past.

CEO Yoram Novick sold Topio to NetApp for $160 million in 2006 during the CDP wave. Does it mean this time he missed the window, he refused dilution or just can’t raise a new round at any reasonable valuation due to the weakness of the business. Who will be the next in that category?