Solid state drive (SSD) data storage provider Kaminario has raised $53 million. The company's current investors participated in the round, including Sequoia Capital, Pitango Venture Capital, Tenaya, Globespan, and Mitsui, together with new investors Silicon Valley Bank, the Lazarus hedge fund, and a large public company that preferred to remain anonymous. Including the current round, Kaminario has raised a total of $128 million to date. "Globes" selected the company as one of its most promising companies in 2012.
Founded in 2008, Kaminario is currently registered in Newton, Massachusetts, and has its development center in Yokneam. The company has developed software for managing organizational storage systems based on flash memory. In a talk with "Globes", Kaminario founder and CEO Dani Golan explains, "The demand from new investors was double what we actually raised; we could have raised $100 million. The reason for the strong demand is the field itself. In my opinion, flash storage is the biggest revolution in IT in the past decade. The storage market has a $130 billion sales volume, and in a world in which the quantity of data doubles every year, this market has undergone a significant change that hasn't been seen in 30 years."
Golan added that the specific demand for his company results from its success in offering cheaper prices than its competitors, and demonstrating flexibility for the growth of the organizations using the company's products. The current round will help accelerate Kaminario's growth, and expand its sales and marketing setup and its support for the Kaminario K2 flash storage solution, which has demonstrated its effectiveness, scalability, and flexibility. The fifth generation of K2 was launched in May 2014, and Golan says that company sales have quadrupled since. "The financial environment has changed dramatically," he said. "Today, there are a number of ways to finance a company that are not necessarily a traditional offering. Our ability to obtain a significant amount of money at a very significant company value without the very significant cost of an offering was more attractive to us."
The storage market has been very hot recently, as seen by one of Kaminario's main competitors, Pure Storage, which has raised $475 million this year in two separate rounds. Another company in the storage field, Fusion-io, with which Kaminario has cooperated, and which numbers Apple cofounder Steve Wozniak among its founders, was acquired in June 2014 by SanDisk Corporation (Nasdaq:SNDK) for $1.1 billion. The fact that so much money is circulating in this industry and demand is sky-high is leaving Kaminario out of the IPO picture at this stage. Those who have followed the company will be surprised at the change of direction that it is now leading, given previous statements about its wish to become a public company. In a late 2011 "Globes" interview, Golan stated, "We're not for sale," and predicted, "The company's IPO is on target for 2013." In another "Globes" interview in October 2012, this target date had become more remote, with Golan saying, "We see our window of opportunity as being up until the end of 2014." Now, at the end of 2014, after raising $53 million, Golan makes it clear that an IPO is not part of the company's plans for the near future. "The board of directors has chosen to lead the company to significant private placements at the level of the current round, and that's the direction we're pursuing," he says, adding, "There are many very strong entities looking for a place to invest their money, and not necessarily in the public market. Right now, we feel that we'll be able in the next 18-24 months to continue bringing in money in other ways that are significantly cheaper than the money received by public companies. Of course, that could change."
Published by Globes [online], Israel business news - www.globes-online.com - on December 1, 2014
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