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Aarohi Announces Funding... Again

Honk if youve heard this before: Storage chip vendor Aarohi Inc. today announced a financing round with McData Corp. (Nasdaq: MCDTA) as one of the lead investors.

Sound familiar? It should, because McData disclosed its investment in Aarohi back in August (see McData Signs Deal With Aarohi). McData contributed $6 million to Aarohi’s $13.5 million "B1" round, giving it approximately 15 percent ownership in Aarohi. McData also holds one of Aarohi's five board-of-director seats.

So why did the announcements come four months apart? Because each company sought to benefit from the timing.

McData, in fierce competition with Brocade Communications Systems Inc. (Nasdaq: BRCD) and Cisco Systems Inc. (Nasdaq: CSCO) in the SAN switching market, announced its investment before Aarohi closed its round, hoping to make known as soon as possible that it had access to Aarohi’s FabricStream technology for its intelligent switch platforms. McData took a charge related to the investment in its third-quarter earnings statement.

Aarohi claims its FabricStream data streaming architecture gives its storage chips better packet-processing performance and lower I/O latency compared with general-purpose CPUs, network processors, and components in host bus adapters. McData backs this up, saying Aarohi’s technology gives it a significant time-to-market advantage for its intelligent switch platforms.

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