Mirantis Gets Funding, Aims for IPO With OpenStack ToolsJack Clark
Mirantis Inc., a provider of cloud-computing software and services, raised $100 million in financing, valuing the startup at as much as $800 million, people with knowledge of the matter said.
The final valuation will depend on whether the startup achieves certain business goals, said the people, who asked not to be identified because the numbers aren’t public. The investment lays the groundwork for an initial public offering in 2016 and gives Mirantis the resources to build a company similar in scale to VMware Inc., which also provides cloud-computing tools, Adrian Ionel, Mirantis’s Chief Executive Officer, said in an interview.
Mirantis, based in Mountain View, California, is the biggest company focused on supporting OpenStack, a free technology developed by a consortium of companies that aims to let small and large firms manage their cloud-computing networks with the same tools pioneered by large Web companies such as Google Inc. and Amazon.com Inc.
Yotam Levy, a spokesman for Mirantis, declined to comment on the valuation.
The financing round was led by Insight Venture Partners. August Capital also joined in the funding, along with existing investors Intel Capital, WestSummit Capital, Telefonaktiebolaget LM Ericsson and SAP SE. Including the new investment, Mirantis, has raised $120 million since it was founded in 2011.
Mirantis, which has more than 600 employees, is part of a new group of technology companies that use OpenStack to develop and manage software that’s delivered over the Web. OpenStack was developed by a group of companies including Intel Corp., Hewlett-Packard Co., Red Hat Inc., and Rackspace Hosting Inc. to help them compete with cloud-computing providers such as Amazon, Google and Microsoft Corp.
The market for OpenStack-related services is projected to be $3.3 billion by 2018 from $883 million in 2014, according to 451 Research Group. The technology targets businesses looking for an open-source alternative to Amazon Web Services, the largest public cloud provider, and alternatives to VMware’s software.
Still, OpenStack hasn’t been able to take meaningful market share away from the major consumer cloud companies, according to Carl Brooks, an analyst at the 451 Research Group.
“Eventually it will be a workable piece of systems technology; that day is not here,” Brooks said.
Mirantis’s customers include Wells Fargo & Co., Home Depot Inc., AT&T Inc., and others.
The funding comes at a time of consolidation in the OpenStack industry. Cisco acquired MetaCloud Inc. in September, EMC Corp. agreed to buy Cloudscaling Group Inc. in October and Red Hat acquired French startup ENovance Inc. in June. Hewlett-Packard agreed in September to acquire Eucalyptus Systems Inc. to develop its cloud-computing expertise, and has based its Helion suite of Web software products on OpenStack technology as well.
“The market is evolving very rapidly. The customers are separating the long-term players from the chaff,” Ionel said.