Pure Storage Valued at Over $1 Billion in T. Rowe Price Funding
Pure Storage Inc., a maker of flash-memory technology for data centers, raised $150 million in a financing round that values the company at over $1 billion.
The funding, led by investors including mutual-fund manager T. Rowe Price Group Inc. (TROW) and hedge-fund manager Tiger Global Management LLC, will help Pure expand overseas and bolster spending on research and development ahead of an initial public offering, the Mountain View, California-based company said today in a statement.
Pure has nabbed customers including Netflix Inc. and LinkedIn Corp. with its storage computers that use speedy solid-state memory chips -- like the kind used in Apple Inc.’s iPhone -- instead of traditional magnetic disk drives. Flash-memory provider Fusion-io Inc. sold shares to the public in 2011 and earlier this week rival Violin Memory Inc. filed to raise as much as $172.5 million in an IPO.
“The public market guys are really only interested in companies that aspire to be public,” Scott Dietzen, Pure’s chief executive officer, said in an interview. “They want a front seat at the IPO.”
The market for enterprise solid-state, or flash, storage is forecast to grow 29 percent this year to $3.2 billion, according to market researcher IDC. Pure competes with EMC Corp. and NetApp Inc. and startups including Nimble Storage Inc.
Pure’s revenue is increasing 50 percent sequentially each quarter, and the company is in the process of hiring a chief financial officer in preparation for an IPO, said Dietzen, declining to comment on timing.
Investors in public and private markets are pouring money into emerging business-technology providers as companies supplement their older computer systems and software to lower costs or improve performance.
SugarCRM Inc., a maker of customer-management software, raised $40 million from Goldman Sachs Group Inc. last week to speed global expansion. Tidemark Systems Inc., a maker of analytics software, raised $13 million this month.
Pure uses special software loaded on its devices that can compress customers’ data so they need to buy less flash storage, which is pricier than disk-based systems.
At $150 million, the Pure deal matches the third-biggest venture investment in a North American business technology company this year, according to Bloomberg data. AirWatch LLC, a maker of mobile device monitoring software, raised $200 million in February. HootSuite Media Inc., whose software manages social-networking activity, raised $165 million on Aug. 1. SevOne Inc., whose equipment monitors network performance, raised $150 million in January.
Pure’s financing also included participation from Fidelity Investments as well as existing investors Greylock Partners, Index Ventures, Redpoint Ventures, Samsung Electronics Co.’s venture arm and Sutter Hill Ventures. The company, which has raised a total of $245 million, plans to use the cash to hire sales and marketing staff and expand in Europe and Asia.
Pure also said that Frank Slootman, CEO of cloud-software maker ServiceNow Inc., is joining the startup’s board of directors. The board includes Workday Inc. co-CEO Aneel Bhusri.
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