Delphix raises $25 million, led by Jafco Ventures

Database virtualization vendor seeing sales topping $20 million in 2012

Delphix announced Wednesday that it's raised $25 million in a Series C round of financing, led by Jafco Ventures, with participation from new investors Summit Partners and Battery Ventures, as well as existing ones, including Greylock Partners and Lightspeed Venture Partners. The latest round of financing brings the company's total amount raised to $45.5 million, since being founded in 2008.

Menlo Park, Calif.-based Delphix, which has 85 employees, makes databases more efficient by virtualizing data, essentially turning redundant hardware copies into efficient software. 

Why do companies need this software? All companies - large and small - have to test their products before making them live for consumption. Typically, the testing happens on duplicate platforms of the "live" platform. Today, most of that duplication takes a lot of time, money and hardware. Many companies make about eight to 10 live copies of their website just to test out new features. These redundant copies are eliminated by only having one single "official" copy that's virtual.   

"What we do is virtualize the data inside the databases and create a single virtual authority and we can deliver a virtual copy of that data - without creating additional physical copies - to the right team at the right time," said Jedidiah Yueh, CEO and Founder of Delphix, in an interview with me. 

If you don't understand that, think about how a DVR can record multiple TV shows into one master copy of that TV show that can be broadcast on multiple TV sets in your house. So rather than take multiple hard copies of a TV show to play on all the TVs, there's only one copy - the virtual one. 

The beauty of one virtual copy is that incremental changes to a website can be added incrementally to the virtual copy, saving time and money, and enabling a company to test faster, thereby releasing new mission-critical applications more often. 

One customer, KLA-Tencor, was able to eliminate several hundred thousand dollars in hard storage costs by using Delphix, said Yueh. It used to take KLA-Tencor about 80 hours of work across four different teams to create physical copies of its databases. And because websites are not static, each release would need a new test environment that accounted for all the new changes. That meant for every feature release, KLA-Tencor had to spend 80 hours to duplicate its database to include the refreshed data.  

But by using Delphix, KLA-Tencor was able to refresh and create duplicate copies with the additional changes in minutes and with one individual.

Prior to using Delphix, KLA-Tencor was able to complete two projects in six months using physical copies of databases. After it rolled out Delphix, it was able to complete 11 projects in the next six months. This resulted in $700,000 to $1 million in storage savings that it might have had to purchase from storage vendors, such as EMC or NetApp. 

Delphix currently works with more than 50 corporations, of which 30 are Fortune 1000, and three rank among the top 10 banks in the U.S. The average annual sales price for its software is $100,000. And, the company is projected to generate more than $20 million in revenue this year, according to Yueh.

Delphix is Yueh's second company.  Prior to Delphix, Yueh founded Avamar, which was acquired in November 2006 for $165 million. Yueh was recently featured in our Today's Entrepreneur column.