InfiniCon Corrals $15M Round

InfiniBand startup lands healthy Series C and Fujitsu reseller deal. Who says IB is dead?

September 25, 2003

3 Min Read
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If you thought InfiniBand was already dead and decaying, take another look at InfiniCon Systems Inc. The IB startup announced today that it has snagged another $15 million round of funding, bringing the total investment in the company to $48 million (see InfiniCon Lands $15M Series C).

Leading InfiniCons third funding round was Bay Partners, which also led the company's $26 million B round in February last year (see InfiniCon Lands $26M). Existing investors Arch Venture Partners, W Capital Partners, and A.G. Edwards Capital also participated in the round, joined by new investors including ChevronTexaco Technology Ventures LLC.

"This round takes us through most of '05, and there’s a very good chance that we will not need another one," says InfiniCon CEO Chuck Foley. The company has been working on securing its latest round since June, he adds.

While VC funding for storage startups has recently been picking up, $15 million is quite a feat for any company in today’s drab economy (see The Billion-Dollar Slump and Report: Most Storage Startups Flop).

And for a startup with the word “InfiniBand” in its mission statement, it borders on a miracle. A couple years ago, the high-speed, low-latency technology was heralded as the next big thing, but today InfiniBand has clearly lost its luster (see our report on Whither InfiniBand?).Many of the companies that bet their futures on what was supposed to be a $50 billion market have since, in Arnold’s words, been terminated. In fact, today’s news comes just weeks after fellow InfiniBand startup Fabric Networks Inc. shut its doors for good (see Fabric Networks Rips at Seams).

So what does InfiniCon have that other IB players don’t? A bit of modesty, perhaps. Instead of vainly trying to turn InfiniBand into the server-and-storage interconnect technology of choice, the company has wedged its way into the narrow high-performance computing (HPC) and database clustering market. Topspin Communications Inc., Voltaire Inc., and IB silicon supplier Mellanox Technologies Ltd. are also, fairly successfully, addressing this space. [Ed. note: Which mainly means that they've managed to keep their doors open.] (See Sun, Topspin Team on Infiniband, Voltaire Mates InfiniBand & iSCSI and Mellanox Ships 100K IB Ports.)

Taneja Group analyst Arun Taneja says that the great InfiniBand purge over the past year has proved to be a good thing.

“I think the reality of InfiniBand is becoming known,” he says. “We’re past the hype, and we’ve settled into the IB realistic stage now. There’s some high-performance computing and clustering. The market won’t necessarily be measured in billions of dollars, but there is certainly enough activity to sustain the three top players.”

Foley, pointing to a recent IDC study, which predicts that the high-performance computing market will reach $4.7 billion this year, insists that the market he’s targeting offers ample room for growth. “That’s an awful big niche market,” he says.InfiniCon, which was founded in June 2000, currently employs between 65 and 70 people, nearly all of whom work in R&D. The company’s latest funding round will largely be used to add to headcount in sales and marketing, Foley says.

Adding to the good tidings for InfiniCon today was the announcement that the company’s OEM partner Fujitsu Ltd. (OTC: FJTSY) will use the new InfinIO 3000 switches for a 512-node cluster of its newly developed Linux-based Primergy servers, deployed by Japan’s Institute of Physical and Chemical Research (RIKEN) to accelerate biotechnology research (see InfiniCon Shrinks Switches). The InfiniCon switches will provide the nodes with 10-Gbit/s, full bisectional bandwidth fabric (FBB).

The cluster will be the largest InfiniBand cluster ever deployed, Foley says, claiming that this deal alone will bring InfiniCon's revenues into the vicinity of $1 million. Hey, just a few dozen more deals like this and it's all gravy!

— Eugénie Larson, Senior Editor, Byte and Switch

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