Flash Memory Pure Storage Lands $225 Million in Venture RoundFlash Memory Pure Storage Lands $225 Million in Venture Round
Enterprise flash array provider Pure Storage has landed $225 million in venture funding, raising the company’s pre-money valuation to some $3 billion, nearly triple where it was valued in a previous investment round less than a year ago.
April 24, 2014
Enterprise flash array provider Pure Storage has landed $225 million in venture funding, raising the company’s pre-money valuation to some $3 billion, nearly triple where it was valued after a previous investment round less than a year ago.
This latest funding, which came from prior institutional investors T. Towe Price and Tiger Global along with new money from Wellington Management, brings to $470 million the amount of capital the 5-year-old Pure has raised to date. Earlier Pure venture investors Greylock Partners, Index Ventures, Redpoint Ventures and Sutter Hill Ventures also participated.
In the past year, Pure’s funding arc has pitched markedly northward—through last May the vendor had raised only $95 million in VC money.
Pure intends to use its new cash infusion to fund expansion into overseas markets and pump up its engineering, sales, marketing and channel partner enablement, officials said. The vendor, which maintains a channel network of some 200 partners, actively promotes its “channel-centric” sales strategy. Last summer, Pure supplemented its then year-old channel partner program with new features and benefits and added an 11-member partner advisory council to help shape its strategy and execution.
Scott Dietzen, Pure chief executive, called the funding round a vote of confidence for enterprise flash array technology.
“This financing at over a $3 billion pre-money valuation is a huge milestone for Pure Storage,” said Dietzen. “Yes, it reinforces the health and standout growth of our business to date, but more importantly, the disruptive potential of an all-flash array that costs less than disk going forward. In 2014, no one should be buying mechanical disk to run databases or virtual machines,” he said.
“Our additional funding ensures that many more businesses will get the tenfold performance acceleration and power savings of Pure Storage,” Dietzen added. “With our top-quality investors and partners, Pure is well-positioned for long-term independence and ultimately to lead the ferociously competitive storage market as we leave the mechanical legacy behind.”
Pure said that it has grown sequentially by 50 percent each quarter in the last year, increased its global customer base by 650 percent, shipped its 1,000th FlashArray to end customers and opened offices on four continents. The company claims 700 percent year-over-year revenue growth.
With all this big money talk one might assume Pure is thinking about an IPO, but Dietzen told Re/code that’s not on the horizon; rather, the company wants to hold on to some “luxuries that we have as a private company.” Pure still doesn’t have a chief financial officer (CFO) on board, a necessity were it to explore filing an S1 IPO statement with the SEC.
“We don’t want to go public before we’re ready, and we have the luxury of being able to choose when that happens,” Dietzen told Re/code. “We won’t have to go public with a gun to our heads.”
Pure is the 2009 brainchild of storage veterans John Colgrove, co-founder and chief technology officer, a former founding engineer at Veritas Software; president David Hatfield, another former Veritas executive; and John Hayes, co-founder and chief architect who previously served as a Yahoo (YHOO) engineer. Dietzen formerly served as Zimbra’s president and CTO.
Late last year, storage giant EMC (EMC) widened a lawsuit against six of its former employees who jumped ship to Pure Storage, naming the flash maker and a total of 44 ex’s in allegations of stolen intellectual property and trade secrets.
Dietzen defended Pure in a subsequent blog post, calling EMC’s claims a “sideshow to the real competition” between Pure and EMC. “Based upon our present understanding, I am wholly confident that Pure Storage and all of our employees have been behaving ethically, and that these charges will be proven to be without merit,” he wrote.
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