Kaminario, the all-flash storage vendor based near Boston, announced an oversubscribed $75 million round today.
The investment was led by private equity firm, Waterwood Group. Sequoia Capital, Pitango Venture Capital, Lazarus, Silicon Valley Bank and Globespan Capital Partners also participated. Today’s investment brings the total raised to $218 million, according to the company.
CEO Dani Golan told TechCrunch that his company was only looking for $40 million, but the interest was so great, it ballooned to $75 million by the time they were done. Golan said he was proud of the outcome, especially in an investment climate where money has been tight for some startups.
Kaminario made a couple of big bets when it launched back in 2010 that look pretty good today. First of all, the company decided to go with all-flash storage arrays when, Golan says, flash was running around a thousand dollars a gigabyte.
It also made a deliberate play for the cloud market, particularly SaaS vendors, who need the kind of performance flash storage can provide. This was contrary to most storage vendors’ approach at the time, who were targeting enterprise IT.
The market appears to have caught up with their vision — these days, the price of Flash has plunged, and their target market in the public and private cloud has moved into the market mainstream.
While some of the largest companies such as AWS, Google and Facebook build their own infrastructure to accommodate their massive scale, Golan says the vast majority of cloud companies have continued to rely on vendors. “Most SaaS vendors need to build a private cloud or host in a public cloud, and the only way to get predictability of performance across customer-facing applications, scalability and cost efficiency is to standardize on all flash storage infrastructure,” Golan explained.
The traditional storage market is controlled by legacy vendors such as Dell Technologies (which now owns EMC), Hitachi, IBM, HPE and NetApps. He believes that his company can beat these competitors in the target cloud market because his company has built its storage solution specifically for this market.
As for Pure Storage, another all-flash player that went public in 2015, Golan speaks highly of them, but says they took a different tack when it came to selling their all-flash solution. “We have a lot of respect for Pure Storage. At the heart of what they do, they still go after IT.” He sees Pure facing the same pressures the legacy vendors face from a market that, while still large, is shrinking over time.
Today’s funding represents a substantial amount of money and the company intends to use it to expand internationally and develop some new products for their portfolio. He says that they would also consider some strategic acquisitions if the right target became available. While Golan wouldn’t share employee number targets, it’s fair to assume that they will be increasing the number from the current 275.
As for a possible future IPO, Golan says he isn’t in a hurry. They proved that they could raise more money if they need it to accelerate growth with today’s round. “Private equity late-stage money is there for good companies with good results. That’s the mechanism we have used here, and we will see if we need to use it again to continue to accelerate growth,” he said.