Voltaire Picks Up $15M

InfiniBand startup hopes funding will take it to profitability

March 9, 2004

3 Min Read
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InfiniBand received another vote of confidence today. This time the support came not from a server vendor, but from venture capitalists who served up Voltaire Inc., a maker of InfiniBand switches, with $15 million in financing (see Voltaire Inhales $15M).

Voltaire has lined up customers such as Sandia National Laboratories, Lawrence Livermore National Laboratory (LLNL), Los Alamos National Laboratories, Mississippi State University, and Ohio Supercomputer Center. CEO Ronnie Kenneth says the company will use its latest funding to expand sales, marketing, and customer service staffs, beefing up its current staff of 65 by about 30 percent, with expansion coming in the U.S., Europe, and Japan.

Kenneth says he thinks this round will take Voltaire to profitability, although he refuses to project how long that will take.

We are seeing a clear demand out there now, and we want to satisfy that demand,” Kenneth says. “Customers, end users, and server guys have started to not only show interest but to purchase InfiniBand.”

Baker Capital Corp., Pitango Venture Capital, and new investor Vertex Venture Holdings led Voltaire’s fourth funding round. Previous investors Platinum Venture Capital, Tamir Fishman Ventures, and Challenge Fund

also participated. Voltaire has now received $50 million in total funding.“The InfiniBand market has advanced significantly over the past year with support from leading vendors such as IBM, Oracle, SUN, HP, SGI, and Apple, and -- more importantly -- from customers in the high-performance computing and enterprise data center markets," Baker Capital partner Ashley Leeds says.

While InfiniBand remains primarily a player in the niche high-performance computing area, it's at least generating revenue from that niche. InfiniBand vendors also say they are getting closer to winning space in the data center through utility or grid computing (see Topspin Boots Up Server Virtualization).

The recent deals Voltaire and other InfiniBand startups have struck with technology leaders such as IBM Corp. (NYSE: IBM), Sun Microsystems Inc. (Nasdaq: SUNW), Hewlett-Packard Co. (NYSE: HPQ), Dell Computer Corp. (Nasdaq: DELL), and Oracle Corp. (Nasdaq: ORCL) apparently helped facilitate Voltaire's funding round (see Dell Joins InfiniBand, Sun Heats Up InfiniBand, and SGI, Sandia Pick Voltaire InfiniBand).

According to IDC

analyst Vernon Turner, “This is a sign of two things: First, the market is accepting InfiniBand; second, major system vendors are announcing InfiniBand in their roadmaps, so the investment community is seeing real opportunities. Investors are saying, ‘Let’s see if this thing can get over the hump in the next 18 months.’ ”

Turner also says the InfiniBand vendor space has been whittled to the “right size” with three survivors -- Voltaire, Topspin Communications Inc.,and InfiniCon Systems Inc.CEO Kenneth wants to deepen Voltaire’s partnerships with server vendors. While Voltaire has had success selling to end users such as supercomputing labs, its rival Topspin has lined up OEM deals with the four major sever vendors. Kenneth hopes to also become part of the grid or utility computing strategies of IBM, HP, Sun, and Dell: “InfiniBand goes hand-in-hand with grid computing, and that’s the strongest opportunity ahead for all of us."

— Dave Raffo, Senior Editor, Byte and Switch

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