Storage Startups Surge

Researchers see uptick in data storage startup funding in the second quarter

July 23, 2005

4 Min Read
Network Computing logo

Funding for data storage startups more than tripled between the first and second quarters of this year, and more than twice as many data storage startups were funded, according to the latest research from Ernst & Young and VentureOne.

The research shows that $49.5 million invested in the first quarter soared to $175.2 million in the most recent one. That money was distributed among five deals in the first quarter and 12 in the second.

But doff the rose-colored shades: The first half of 2005 saw $225 million invested in data storage by venture firms, compared with $235 million in the first half of 2004, the firms say.

Still, the market likes storage startups. Despite restrictive budgets, customers are keen to improve the efficiency and useability of stored data (see IT M&A Is Down, Report Says and Survey: Storage Spending Will Slow). Some are using compliance mandates as a way to invest in the technology they require. All this results in ongoing investor interest.

There is clear evidence right here on Byte and Switch of robust storage investment this year. Though it's too soon to tell how the figures will compare with 2004, by our reckoning, storage startups have racked up more than $350 million so far (see the table below). Investment appears to be on track to meet or exceed the $500 million revealed in announcements on Byte and Switch at the end of 2004 (see Storage Startups Top $500M and Startups Score in Funding Uptick).

The following table was culled from announcements we've published so far in 2005.

Table 1: Startup Funding 1H2005

Company

Description

Latest round

Date announced

Round

Total funding

Aresenal Digital Solutions

Storage services

$15 million

February-05

N/A

$101 million

BlueArc Corp.

Next-gen NAS

$15 million

May-05

N/A

$175 million

Bocada Inc.

Backup software

$9.5 million

January-05

3rd

$20 million

Cloverleaf Communications Inc.

Virtualization appliance

$11 million

June-05

3rd

$36 million

Compellent Technologies Inc.

SANs

$15 million

May-05

N/A

$38 million

ExaGrid Systems Inc.

NAS

$13.5 million

April-05

2nd

$22 million

GlassHouse Technologies Inc.

Storage consulting and implementation services

$20 million

February-05

4th

$27.1 million

Incipient Inc.

Virtualization software

$20 million

January-05

3rd

$55 million

Isilon Systems

Clustered intelligent storage

$20 million

May-05

4th

$59.9 million

Level 5 Networks Inc.

Data center interconnection semiconductors

$30 million

June-05

2nd

$39 million

Njini

ILM software

$6.4 million

May-05

1st

$6.4 million

NeoScale Systems Inc.

Storage security appliances

$12 million

March-05

N/A

$43 million

Netezza Corp.

Data warehousing appliance

$15 milllion

January-05

4th

$68 million

NSI Software

Data replications software

$7 million

January-05

3rd

$60 million

OnStor Inc.

Next-gen NAS

$24 million

June-05

4th

$79 million

OuterBay Technologies Inc.

ILM software

$12 million

March-05

3rd

$40 million

Revivio Inc.

CDP appliance

$25 million

January-05

3rd

$55 million

Riverbed Technology Inc.

Wide-area file services software

$20 million

January-05

3rd

$37 million

SiliconStor Inc.

SATA multiplexer chips

$9 million

March-05

1st

$12 million

Tacit Networks Inc.

Wide-area file services software

$12 million

May-05

3rd

$36.2 million

Topio

Backup and recovery software

$8 million

April-05

4th

$21 million

Troika Networks Inc.

Intelligent storage switch

$14.4 million

July-05

2nd

$81.4 million

Voltaire Inc.

InfiniBand switch

$15 million

June-05

5th

$65 million

Zetera Corp.

iSCSI alternative transport technology

$13.5 million

May-05

1st

About $18 million

Mary Jander, Site Editor, Byte and Switch

SUBSCRIBE TO OUR NEWSLETTER
Stay informed! Sign up to get expert advice and insight delivered direct to your inbox
More Insights