Nimble Storage raises $40M in funding

Steven Loeb · September 10, 2012 · Short URL: https://vator.tv/n/2a08

Hybrid storage company getting ready for IPO

Updated to reflect comments from Nimble Storage

Startup enterprise flash storage provider Nimble Storage has raised a $40.7 million in an mezzanine fundraising round, the company announced Monday.

Sequoia Capital and Accel Partners led the oversubscribed round. All of Nimble Storage’s previous investors participated in the round, along with new investor GGV Capital.

Nimble Storage is a supplier of data storage, backup and disaster recovery. 

There has been a major shift in dominant forms of storage systems, Dan Levy, VP Marketing at Nimble Storage, said in an interview.

Whereas the market was once dominated by companies like Dell and EMC, the emergence of flash technology has put a $20 billion market back in play.

Those companies, Levy said, always used disk storage. While they have recently begun to put flash onto their disk storage, Nimble's makes a hybrid storage systems, which combine both flash memory and high capacity disk, which makes storage both cheaper and faster.

According to Levy, the hybrid systems contain three to fives times the capacity than the larger companies, allowing easier use for consumers. 

"While most flash-based startups have concentrated narrowly on high-performance niches, we've leveraged flash into a much broader technology platform that delivers superior system performance, capacity efficiency, data protection, scalability, simplicity and overall ROI for mainstream enterprise applications,” Suresh Vasudevan, CEO of Nimble Storage, said in a statement.

With this latest round, Nimble has raised $98 million total, after a $16 million round C in 2010, from investors Accel Partners, Lightspeed Venture Partners, and Sequoia Capital, and a $25 million round D in July 2011, led by Artis Capital Management, along with previous investors.

Nimble will use the funding to expand its presence in Europe and establish itself in Asia. The company currently operates in Northern Europe, in the UK, Germany and the Netherlands. The company is aldrady beginning to expand into Sweden, as well as NEw Zealand and Australia.

Levy says that India and Singapore are on the horizon, with the company planning to begin its expansion later this year.

The company will also use the new money to strengthen its position for an IPO, which will most likely debut either in the second half of 2013 or the first half of 2014.

The market is very attractive for data storage right now, Levy says.

"It's a very hot commodity," especially after so many social media and gaming companies, such as Facebook and Zynga, faltered.

There are a number of strong enterprise companies that Levy points to as proof that the market is strong: Palo Alto Networks, ServiceNow and Jive Software.

At the end of June, software-as-service company ServiceNow debuted 37% above its IPO price of $18, which emboldened Palo Alto Networks to begin its roadshow.

Palo Alto Networks went public at the end of July and saw shares go up 26% in its first day of trading, closing at $53, up from its $42 offering price.

Jive Software went public in December 2011, closing out the day at $15.06, more than 25% above the $12 IPO price.

“With our financial performance well ahead of our most aggressive estimates, we're continuing to reinvest across all areas of our operations as we advance towards an IPO and become an industry leader in the market evolution to flash-optimized storage,” says Vasudevan.

San Jose-baed Nimble Storage was founded by former Data Domain and NetApp executives Varun Mehta and Umesh Maheshwari in 2007. Since first shipping its product in 2010, Nimble has sold over 1,000 deployments. Its customers include Grocery Outlet, City of Cupertino, First Choice Health, Plaxo, Berkeley Research Group, San Mateo Credit Union, Premier Medical, Northrim Bank, San Diego Convention Center, Vision Critical, Imagine Learning and Graniterock.

While the company is not yet profitable, that is because Levy says that it has been focusing on maximizing growth and reinvesting in sales. The company is projecting to add even more than the 175 new customers it added in the most recent quarter.

The flash storage market

Flash storage has been heating the last few years. Levy says that flash storage will be dominant in five to 10 years, and has seen 100% growth year to year since 2007, though he admits that the technology barely existed back then.

As the technology heats up, so do the number of companies who have either pulled in significant money, or been purchased recently.

SandForce, a leading provider of flash storage and SSD processors for enterprise, was acquired by LSI for $370M in January. In April, Violin Memory closed a $50 million round, at an $800 million valuation, which it later expanded to $80 million. Trintri, producer of VM-aware storage appliances, raised $25 million in July.

Last month, Pure Storage pulled in $40 million to expand into Europe and Asia, while Nutanix raised $33 million in Series C funding. 

In May, EMC acquired Israel-based flash storage company XtremIO for $430 million.

Nimble Storage was unable to be reached for comment

(Image source: venturebeat.com)

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