Storage SaaS vendor RainStor lands $7.5. million in new funding

RainStor, a SaaS provider of software for storing and retrieving structured data in an enterprise or in the cloud, today said it raised $7.5 million in second round funding.

The company’s latest product, RainStor 3.5, was introduced in December 2009 and coincided with the six year old UK-based company’s entrance into the U.S. market, a name change from Clearpace and the opening of an office in San Francisco.

RainStor earned kudos from William Fellows, an analyst with The 451 Group, who said its solution removes one of the reservations businesses have about doing storage in the cloud.

“Rainstor is challenging one of the misconceptions around cloud computing: that it can’t be used for storing and analyzing database-centric data,” Fellows wrote in a report accessible from RainStor’s Web site. “We believe many businesses will be able to make a compelling case for … moving the data out of their datacenters and onto cheaper and more flexible cloud platforms.”

RainStor loads and compresses structured data (information that is stored in production databases, data warehouses, security and event log files) by typically a 40:1 ratio from any source and stores it on any storage platform.

RainStor manages application archiving, application retirement and SaaS data escrow. The company said its technology manages more inactive structured data with less hardware, storage and at lower cost compared to traditional database and data warehouse offerings. Fellows’ June 2009 report states that RainStor doesn’t have much direct competition, but is indirectly in competition with industry giants HP and IBM through acquisitions each has made in the database archiving market in recent years.

RainStor’s offerings are similar to those of Concord, Mass.-based Zettapoint, Fellows said, which also offers database storage and retrieval and has partnerships with EMC and Oracle. However, RainStor told Fellows it hadn’t come up against Zettapoint in the market.Besides Informatica, RainStor identified Adaptive Mobile, an Irish provider of security software for mobile operators, and OnPoint Technologies, a strategic private equity investor, as partners, in addition to several independent software vendors, system integrators and managed service providers.

Another company with a similar market approach to RainStor’s is CopperEye, a provider of data retention and retrieval software. SenSage is another competitor, although it’s limited to log and security event storage. Teradata is in the same space, but it sells an appliance rather than a SaaS offering, Fellow stated.

Tim Danford, a managing director at Storm Ventures, will take a seat on the RainStor board.

The latest round of funding comes from new funders Storm Ventures and Informatica, an enterprise data integration software vendor. Previous investors Doughty Hanson Technology Ventures and The Dow Chemical Company also chipped in.