The sub-3.5 disk drive market has proved to be something of a graveyard for the hopes of start-up companies, but nothing daunted, venture capital investors are flocking to back Milpitas, California-based Avatar Systems Corp, formed to pioneer a 2.5 remov able cartridge disk drive that takes palm-sized 170Mb removable HARDiskettes. Avatar, which has its main plant in Thailand, has raised $16m in additional investment, just over half in cash and the rest in credit facilities from three of the largest banks in Thailand. The funds will be used to buy additional production equipment, add engineering and production staff in the US and Thailand, and buy components and materials used to manufacture the drives and HARDiskettes. Disk drive production will now be transferred to Thailand in early October; HARDiskette volume production was moved to Thailand in June. The 125-employee company’s plant is in the Latkrabang suburb of Bangkok.
