Venture capitalists are clambering to fund flash storage startups, the new wave of technologies that are disrupting the traditional data center.
The latest announcement comes from Virident Systems, a Milpitas, California-based company that had no trouble raising $26 million dollars in fourth round funding led by Mitsui Global Investors, with participation from Globespan Capital Partners, Sequoia Capital, and Artiman Ventures. The company has also brought on a new CEO, Mike Gustafson, a former SVP and GM at Hitachi Data Systems. Gustafson will also take a position on the board of directors.
The space is crowded with legacy vendors and startups, but Gustafson said the market opportunity for flash is big enough for everybody. “Flash will be the touchpoint in every part of the data center infrastructure,” he said. “There is tremendous confidence around this space.”
Companies like Virident claim that data centers are running out of storage space and that we need a reliable alternative. According to Gustafson, flash-based memory is still too expensive to be a data center’s primary storage technology, but solid-state disks will replace mechanical hard disk drives in the coming years.
“The flash storage market is predicted to grow to $4 billion by 2015, and this investment only strengthens our conviction that Virident will become the primary industry provider of the fastest storage class memory solutions to the world’s leading enterprise datacenters,” said Sanjay Pichaiah, investment director at Mitsui Global Investment, in a statement.
Virident has attracted its customers, primarily high-tech companies, with the promise that it will reduce costs to tackle high-performance applications in the enterprise and is 10 times faster than the competition. Virident is most often compared to Fusion IO, a storage memory company that dominates in this space and counts Apple cofounder Steve Wozniak as its chief scientist.
Virident is not yet profitable, but with its latest funding round it will roll out an expansion of its sales and marketing team. Gustafson told me he joined the company as he sees potential for an IPO. This latest round brings the company’s total funding to $76 million.