Coraid Raises $50 Million From Investor Group Led by Crosslink

Coraid Inc., a maker of data-storage devices for businesses, raised $50 million from an investor group led by Crosslink Capital to expand its product engineering team and global operations.

Crosslink was joined by computer hard-drive maker Seagate Technology Plc (STX) and Kinetic Ventures LLC, Coraid said today in a statement. Early investors Menlo Ventures, Allegis Capital and Azure Capital Partners also participated in the funding round.

Coraid uses Ethernet, a computer-networking technology, to connect storage, which it says is faster than traditional enterprise storage devices at a lower cost. The Redwood City, California-based company now has 1,500 customers in 45 countries, including the U.S. Department of Homeland Security and Northrop Grumman Corp. (NOC), a U.S. defense contractor.

“The storage sector is still dominated by older technologies developed in the mainframe era,” Kevin Brown, Coraid’s chief executive officer, said in an interview. “We see a demand for an alternative to the old storage model. And we are really benefiting from it.”

Coraid was founded in 2004 by Chief Technology Officer Brantley Coile, the inventor of a technology called PIX Firewall that was acquired by Cisco Systems Inc. (CSCO), according to Coraid’s website.

Coraid competes with storage-equipment makers led by EMC Corp., Dell Inc. (DELL) and NetApp Inc. (NTAP) The company’s revenue has grown sixfold in the past two years and reached “double-digit millions” in 2011, Brown said.

The company said on Oct. 19 that it had acquired Yunteq Inc., which makes software that helps run cloud-computing systems. Coraid said the purchase would help it to meet demand for cloud computing, which lets companies run software stored on the Web instead of their own server computers.

To contact the reporter on this story: Xu Wang in New York at xwang206@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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