Compellent Compiles $14M More

Stealthy startup has landed more funding, but still won't say what it's working on

July 18, 2003

3 Min Read
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Like Europes royal families, stealthy storage startup Compellent Technologies Inc. just keeps tumbling into cash without ever revealing what its job actually consists of. The startup, keeping its lips securely zipped, said today that it has landed another $14 million in funding (see Compellent Lands $14M).

The funding round, which brings the company’s total cash pile to $23 million, was led by new investor Cargill Ventures. Existing investors El Dorado Ventures and Crescendo Ventures also participated in the round (see XIOtech Founders Back in Business).

“We’re real excited,” says Compellent CEO and co-founder Phil Soran. “This is a good validation for us.”

The startup didn’t even have to go looking for the funds, Soran says, insisting that the latest funding was an up-round. “We still have the majority of money left from last year’s funding.”

The Minneapolis-based company says it will use the new influx of cash to boost product development, channel sales, and marketing programs. But development and marketing of what? Compellent won’t go further than saying that it’s developing “solutions that creatively address customer’s network storage issues, significantly expanding the addressable network storage market.” Well that settles that, then.In an interview with Byte and Switch last July, Soran divulged that his new company was working on a product in the SAN management software space. Today, however, he insists that the product isn’t limited to software. And while he said last year that the company expected to launch its mystery product in the first half of this year, he now refuses to say if it's even in beta-testing.

Soran and co-founders John Guilder and Larry Aszmann were also the trio behind XIOtech Corp., the high-end SAN disk array and software maker that was sold to Seagate Technology Inc. (NYSE: STX) in 2000, and then spun out again late last year (see XIOtech Hot-Swaps CEO and XIOtech Snatches Rash of Cash).

The former XIOtech team's being at the helm of Compellent is the main reason Cargill Ventures decided to lead this latest round, according to the venture firm’s managing director David Patchen. “We are very excited about this,” he says. “The company has a management team that has worked together in the past, and was very successful, [and] has a deep knowledge and experience in the storage space.”

And of course, the management team isn’t the whole story. Patchen, who sits on Compellent’s board, says he actually knows what they’re up to, and he is very impressed. “What they’re doing is quite novel,” he says. “No one else has done it before.”

So what's the point of all this secrecy? Soran says Compellent wants to build up customer demand before it goes out boasting about what its product can do. The company is going about spreading the word to potential customers through its Compellent Customer Council (C3), a group of network storage resellers and their customers that provide Compellent with feedback on its technology. Soran says that the startup has been in active discussions with dozens of companies over the past several months. “It’s really, really going well,” he says.While Soran, of course, won’t divulge what kind of customers the company is targeting -- beyond saying that its technology addresses a broad market, ranging from small businesses to large enterprises -- Patchen says former XIOtech customers should help Compellent get traction. “The team has a pretty loyal customer base from their past company,” he says.

Compellent currently employs 36 people, the majority of whom work in R&D. That’s up from the 13 engineers the company employed a year ago.

— Eugénie Larson, Senior Editor, Byte and Switch

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