Quellan Raises $20M, Eyes Storage Market

Chip manufacturer Quellan has raised $20 million in Series C funding as the firm looks to crank up its storage interconnect business, touting a copper-based alternative to fiber optic cabling.

The round, which was led by cabling vendor (and Gore-Tex manufacturer) W.L. Gore & Associates, also included Harbinger Venture Management, MiTAC, and Glynn Capital Management. Although Quellan CEO Tony Stelliga would not reveal the startup's total funding, he told Byte and Switch that this figure is "somewhere north of" $40 million.

Quellan, which was founded in 2002, started out developing chips to boost the signal quality on consumer products such as headphones and cellphones. Last year the startup got into the data center business, unveiling a cable connector built around its Q:Active chip, which aims to boost the performance of data transferred over copper cables.

Distance is a key part of Quellan's data center spiel. Although more expensive than copper, the low latency nature of fiber optic cabling means that it can be used over longer distances. Copper cabling, for instance, is limited to deployments of six or seven feet in many supercomputing deployments, according to Stelliga, although he claims that Quellan's Q:Active connector resolves this issue.

"We allow our customers to run data over the same distance that they would on fiber optic cables, but on copper," he says, explaining that the firm uses cables from its partner and investor W.L. Gore with its connector technology.Quellan has already racked up some big-name storage customers for this technology, including Sun, QLogic, and Force10. "They are using that cabling between their storage switches, their HBAs, and their InfiniBand equipment," says Stelliga. "We have got several [deals with storage vendors] in the pipeline that we can't talk about yet."

In total, Quellan has around two dozen vendors using its chip technology. These customers are spread across the consumer and enterprise sectors and include switch vendor Fulcrum Microsystems and interconnect specialist Molex.

With the Series C funding burning a hole in his pocket, Stelliga is now looking to sell the technology to end users as well as vendors. "We have had a good dialogue with financial institutions and the big banks," he says, adding that the firm is also "getting a lot of traction" with some large supercomputing sites.

The CEO is now looking to enhance Quellan's chip technology, boosting its ability to transfer data. At the moment, the Q:Active connectors can send data at a maximum rate of 35 Gbit/s, although Stelliga wants to push this figure up. "We want to do 40-Gbit/s, 80-Gbit/s, and 100-Gbit/s," he says, explaining that these products will be available in mid-2008.

The Santa Clara, Calif.-based startup is also planning to increase its headcount over the coming year, particularly in Asia. "We're going to be hiring more applications engineers in Japan and Taiwan," says Stelliga, adding that he expects to expand the firm's workforce from 50 to between 65 and 70 by this time next year.At this stage, there are no plans for another round of funding. "That's not on our radar -- our goal now is to get to a point where we're profitable and generating cash." Stelliga predicts that this should happen sometime next year.

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