Panasas Snags $25.4M

Startup secures second round, but future is still uncertain

October 2, 2001

2 Min Read
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Network storage startup Panasas has racked up a second round of funding worth $25.4 million (see Panasas Scores $24.5M).

The financing, from notable Wall Street and Silicon Valley venture capital firms, is a strong endorsement of the company and its ambitions during this tough climate.

Carlyle Venture Partners, an affiliate of private equity firm The Carlyle Group, led the round in partnership with Goldman Sachs & Co. and Mohr Davidow Ventures (MDV), which led the company's initial funding round of $10 million. Additionally, Bob Grady, managing director of Carlyle Venture Partners, has joined Panasas's board of directors.

The investment will allow Panasas to bring to market its network-attached storage appliance, dubbed Smart Drive, which it claims will offer a marked improvement in storage scaleability, capacity, and performance.

There are certain issues the company has yet to fully address, however -- one being just how its product will work and exactly what the first iteration, expected to be out mid-2002, will feature. Until then, the jury is out on what impact Panasas might have (see Panasas Pins Future on Unproven Spec).Our goal is to eliminate the need for customers to choose between scaleability, performance, and ease-of-use in building large-scale storage solutions,” says Panasas CEO Rod Schrock. “If you consider that experts put the network storage market -- even with its existing limitations -- at $47 billion by 2004, that suggests fertile ground for a better approach.”

These numbers were compiled before the bottom fell out of the economy, however, and well before the events of September 11, which analysts say have quashed any hopes of a recovery in IT spending budgets. So it makes no difference how great Panasas says it is, if no one is spending any money.

Indeed, businesses are often reluctant to take risks on new ideas and technologies in hard times, preferring instead to stick with the relationships they already have and the technology they already know.

— Jo Maitland, Senior Editor, Byte and Switch

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