Chelsio Raised $17 Million to Push Its 10GbE Products

Chelsio Communications, Inc., provider of 10 Gigabit Ethernet (10GbE) adapters, ASICs, and storage solutions, announced the completion of a private funding round, raising a total of $17 million.

The funding is from existing investors, including New Enterprise Associates, INVESCO Private Capital, Investor Growth Capital, LSI Corporation, NTT Finance, Vendanta Capital, Abacus Capital Group, Pacesetter Capital Group, Horizon Ventures, and one new participant, Mobile Internet Capital, Inc.

According to Chelsio president and CEO Kianoosh Naghshineh, the new funding will be used for continued development of Chelsio’s 10GbE adapter products, and expansion into new markets. Powered by its 3rd generation Terminator (T3) ASIC, Chelsio’s portfolio of unified wire adapters enable 10Gb Ethernet to replace niche fabric technologies such as Fibre Channel and InfiniBand in a wide range of applications, including Network-Attached Storage (NAS) filers, Storage Area Network (SAN) Arrays, Server Adapters, High Performance Cluster Computing, Blade Servers, Video Servers, Application Servers and Web Accelerators.

With more than 150 different platform wins and 700 different OEM and end user customers, Chelsio’s cut-through T3 architecture is now established as a reference in many storage, clustering, virtualization, and networking applications. With the revenues increasing by more than 25% each quarter for the past few quarters, and with a strong sales funnel, this financing is expected to take the company to profitability.

“Thanks to our great customers and the persistence and confidence of our investors, Chelsio has now crossed the chasm from a start-up to a reliable long term supplier in this space,” said Naghshineh. “This new capital not only allows us to continue our technology leadership with our unified wire adapters and build on the success of T3 with the addition of FCoE, CEE, SR-IOV, and other protocols, but also allows us to go into new markets with our storage software and appliance products to provide an end to end solution to our customers.”

Comments

Born in 2000, this old start-up has now raised a total of $84 million( including a $25 million financial round in 2005). It's a huge amount. Only 13 storage start-ups currently alive got more than that. Even if Chelsio succeeds for an IPO or find a buyer in the future, it will quite impossible for the first-rounds VCs and LSI to return on their investment even if the start-up is involved in FCoE, a promising technology, but where there is already a lot of competitors, and not small ones (Cisco, Brocade, Emulex, QLogic, etc).

Its 10GbE Unified Wire Adapter was recognized at SC09 as one of the Readers’ Choice 2009 'Top 5 New Products To Watch' in the annual HPCwire Readers’ Choice Awards.

Chelsio demonstrated an HBA FCoE initiator on a server to connect to an FCoE array through a CEE-capable switch at last SNW Fall.

Its most recent product is an hardware offloaded iSCSI initiator driver, enabling 10Gb line-rate iSCSI performance over its unified wire adapters in Windows 2003, Windows 2008-SP2 and Windows 2008-R2 environments.

The firm also recently announced that its single- and dual-port 10GbE adapters have achieved VMware Ready status for VMware ESX 4.0.

Last February, Chelsio reaches milestone with 100th platform win and now says that this figure increases to 150. Its server partners include big names like HP, IBM, NEC and Sun.