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August 29, 2013

Pure Storage gets ‘biggest funding round ever’

That'll do nicely

By Jason Stamper

All-flash disk array vendor Pure Storage has closed a £96m ($150m) funding round, which it says is the single largest private funding in the history of the enterprise storage industry.

The firm also announced it has hired former Data Domain CEO and current ServiceNow CEO Frank Slootman to its board of directors. An early angel investor in the firm, Slootman will now take a more hands-on role with Pure Storage, as a key strategic advisor.

The funding round was led by T. Rowe Price, Tiger Global Management and other public market investors, with participation by its previous venture capital investors Greylock Partners, Index Ventures, Redpoint Ventures, Samsung Ventures and Sutter Hill Ventures. The new funding brings the company’s total capital raised to date to $245m.

The firm said it will use the additional cash to accelerate the expansion of its European and Asia-based operations, grow its sales, support and marketing teams worldwide, and increase its investments in research and development.

"Pure Storage is experiencing much of what we did at Data Domain," said Slootman. "They’re replacing one storage media (disk) with another (flash). They pioneered the use of inline data reduction to remove the cost hurdle for the media upgrade, and, as a result of being the first to get this right they are growing about as fast as companies can grow organically. I am glad to be able to offer my own perspective in driving and managing growth to the top tier board of directors and leadership team at Pure."

Pure Storage says it combines proprietary data deduplication and compression technologies with multi-level cell (MLC) flash memory to deliver an enterprise-grade all-flash storage array for less than the cost of mechanical disk. In a recent CBR interview, Pure Storage CEO Scott Dietzen said, "Our flash arrays are dramatically simpler, uses less power and are ten times faster and no more expensive than traditional disk. People don’t believe us when we say we can give them flash for the price of disk."

"We are very selective in the private companies that we choose to invest in," said Henry Ellenbogen of T. Rowe Price Associates. "In our view, Pure represents a rare combination of disruptive innovation, strong leadership, and strong growth. In particular, customer references were excellent."

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Since releasing its flagship FlashArray to general availability (GA) in 2012, Pure Storage has achieved over 50% consecutive quarterly growth, surpassing previous industry growth benchmarks set by NetApp and Data Domain. Pure Storage now claims to be the fastest-growing storage company ever.

In the first half of 2013, the company established new bases of operations in more than 10 countries across three continents, including: United Kingdom, Netherlands, Norway, South Africa, Denmark, Poland, Germany, Japan, Korea, Australia and Singapore.

"In 2009, we set out to build the next great storage company," said Dietzen. "Today, we are taking our most significant step yet toward realising that goal. This landmark financing reinforces our position as the frontrunner in leading the transition from mechanical disk to flash memory in the data centre – perhaps this decade’s most significant IT disruption."

"We are thrilled to have the strategic guidance of Frank Slootman and world-class public market investors, like T. Rowe Price and Tiger Global among others, to support us in this mission," he said. "2013 has already proven to be an auspicious year for Pure Storage, with record growth on all fronts and our recipe for all-flash storage at the price of disk anointed us as the one to which our competitors aspire. Fortified by this pre-IPO funding round, we will continue to accelerate our global business. Expect even bigger things from Pure in the months and years to come."

The flash array market is certainly hotting up. In May last year EMC bought all-flash array vendor XtremIO and brought a product to market in March, while in February this year NetApp announced a new all-flash array, the EF540, as well as a brand new flash-architected product family, FlashRay.

Other competitors in the flash array market include HP 3PAR, HDS, Whiptail, Violin Memory and Skyera.

Read our recent in-depth look at the flash array market here.

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