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Data Storage Startup Infinidat Raises $150 Million at $1.2 Billion Valuation

Wednesday, 6. May 2015 - 12:17

Infinidat Inc., a secretive young data storage company, has burst into public view with $150 million in new funding and a valuation of $1.2 billion, placing it among the most valuable privately held companies in the world. The round was led by TPG Growth and takes total funding to $230 million, which may be enough to take Infinidat to an initial public offering, according to head of marketing Gareth Taube.

Founder and Chief Executive Moshe Yanai “has started and sold a number of companies, but his mantra for this one is to take it public,” Mr. Taube said. Mr. Yanai, who’s been working on storage technology in some form since the 1970s, started Infinidat in 2010. He is a former fellow at both EMC Corp.EMC -2.61%, where he is recognized as “one of the founders of the modern EMC,” which began specializing in storage products in the late 1980s after he joined, and International Business Machines Corp.IBM -0.51%, which acquired his previous storage company, XIV, in 2008.

Infinidat has been selling its product InfiniBox for about 18 months and claims Fortune 500 customers, although it declines to name them. A person close to the transaction said the company, which has a quality assurance lab in Israel and an office in Needham, Mass., has deliberately avoided Silicon Valley buzz. “No one in the valley knows what this company is up to, how large it is, the deals they’re able to sign,” this person said. With Infinidat winning some deals, Mr. Taube said the company is ready to operate more publicly. “We’ve decided to raise awareness of the company in the market,” he said.

The new money will be used to expand Infinidat, he said, which currently has about 200 employees. Infinidat has filed more than 100 software patents, and its product, InfiniBox, lets customers store as much as 2 petabytes (2 million gigabytes) of data on a standard 19-inch, 42-unit storage rack. The company claims high performance and 99.99999% reliability, meaning InfiniBox is down for less than three seconds per year.

Technical breakthroughs in addition to the reliability include the ability to use a high number of 6-Terabyte spinning disks (the ratio is 480 hard disks to three storage controllers) balanced against a large amount of flash memory (38 Terabytes), which raises speed while lowering cost, Mr. Taube said.

Also, he said, storage technology has improved over the years, and “we now have the ability to create very sophisticated algorithms and model these systems to the point where we know what combinations of price, performance and hardware availability can be utilized in order to achieve optimum results.”

Industry analysis firm Gartner, which recommended Infinidat as one of several “cool” emerging storage vendors, said in a report that while InfiniBox has low acquisition and ownership costs, the company “will have to overcome the risk-averse behavior of the decision makers” and develop tight software partnerships, enthusiastic customer references and easy access to its integration labs if it expects to succeed in the high-end storage market.

Infinidat previously raised $80 million from a group of private investors, MII Ltd., when the company was starting in 2010. As part of the new funding, TPG’s John Marren joins the board.

Deborah Gage

Source: 
blogs.wsj.com
Tags: 
funding
Startup Infinidat
storage technology