Khosla leads $25M round in Nutanix

Nutanix is one of the first companies to raise from the newly closed $1.05B Khosla Ventures IV fund

Financial trends and news by Faith Merino
October 25, 2011
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Last week, Khosla Ventures closed its newest $1.05 billion fund for clean tech, IT, mobile, and Internet technology.  Now the firm has unveiled one of the very first investments from the Khosla Ventures IV fund: Nutanix, a datacenter virtualization company.  Khosla led Nutanix’s $25 million Series B round, which also got help from previous investors Lightspeed Venture Partners and Blumberg Capital.

Founded in 2009, the company’s compute and storage virtualization architecture puts a new spin on traditional network storage in datacenters.  Breaking free from the expensive and inflexible SAN and NAS, Nutanix sets the stage for a highly scalable, cost effective enterprise-grade private cloud.

“When I was at Sun Microsystems, the focus was on decoupling the client and the server over a physical network. In the 30 years since then, the clock has turned full circle,” said Vinod Khosla, in a statement. “Virtualization has made it possible to run clients and (storage) servers in the same hardware. Network storage, as we know it, is ready to be radically disrupted. Datacenters will be dramatically faster, simpler and greener with Nutanix.”

How exactly is it greener? The Nutanix Complete Block has a datacenter footprint that's two- to five-times smaller than traditional datacenters, reducing power and cooling costs by 50%, the company tells me. 

The funding news comes on the heels of the August launch of Nutanix’s flagship product, Nutanix Complete Cluster, a converged compute and storage hardware and software solution for scaling out a virtualized data center.  The product ended up winning the Best of VMWorld 2011 for desktop virtualization.

The company said in its announcement that it is seeing a lot of interest from mid to large enterprise customers.  It plans to use the new funds from this round to expand its presence in domestic and international markets.  Additionally, Shirish Sathaye of Khosla Ventures and Mark Leslie, former CEO of Veritas Software, will both join Nutanix’s board of directors.

Virtualization solutions are generating lots of interest from investors.  Earlier this year, user virtualization company AppSense raised $70 million in a round of funding led by Goldman Sachs.


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