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Cloud infrastructure provider Faction announced today a funding round of $11 million — $5 million in equity and $6 million in debt.
The Denver-based company provides infrastructure as a service (IaaS), and more. “Our FIX (Faction Internetwork eXchange) product extends those private clouds to public providers in a patent-pending, unique way for new multi-cloud use cases,” said Luke Norris, chief executive, in an email to VentureBeat.
Since we last spoke with Norris in 2014, the startup has expanded from three to six locations, encompassing 22 data centers. It has also partnered with VMware, NetApp, Digital Realty, and other companies.
The company has changed its name (yet again) from Peak to Faction — and before Peak it was PeakColo. “We were mainly being white-labeled, and three of our larger partners had Peak in the name,” Norris wrote. “As we looked to build a bigger brand, we repackaged the products and the name to match where we were going, which was being a different ‘faction’ to the public clouds.”
Peak Faction is competing with giants. For example, there is Amazon Web Services (AWS), which in the third quarter of 2016 brought in more than $3.2 billion in revenue for its parent company, Amazon.
Regarding AWS, Norris wrote: “They are more and more a frenemy with the likes of IBM, Microsoft, Oracle, etc. Our ability to build private cloud solutions that are predictable and connect the solution to multiple cloud providers through our FIX product means you are no longer stuck with disparate resources across several clouds. With Faction, it all functions as a single cloud resource.”
In terms of customers, Norris said the company has hundreds of service providers that have tens of thousands of customers collectively running on its system. A private cloud subscription from Faction starts at $800 per month.
Faction is profitable, Norris wrote, but he wouldn’t disclose revenue. He did say that revenue increased 44 percent year over year from 2015 to 2016.
Several players participated in the round, including existing investors Meritage Funds and Sweetwater Capital. New equity investors Charterhouse Strategic Partners and Rifkin-Pottle Group joined, with debt money coming from Ares Capital. Faction will use the new money to add more data center locations and make acquisitions.
The company has raised a total of $28 million to date. It was founded in 2006 and employs 50 people.
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