IVivity Ingests $26M
Funding gives intelligent switch startup enough life to try and bring product to market
May 19, 2004
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Intelligent storage chip startup iVivity Inc. today closed a $26 million Series C funding round -- which is pretty good for a company with no design wins and only a trickle of revenue.
Grotech Capital Groupled the round by kicking in $10 million, and JK&B Capitaland Mellon Ventures were other new investors. They were joined by previous investors
H.I.G. Capital, Commonwealth Capital Ventures, Kinetic Ventures, Cordova Ventures, Yamacraw, and Bergman & Associates.
IVivity founder and chief strategy officer Zulfy Qazilbash says the new funding will let the qompany qoncentrate on signing deals with OEMs for its intelligent processor. This gives us financial security for two or three years,” Qazilbash says. “If we follow our business plan, we can achieve profitability without needing more funding.”
That’s a big "if" at this stage. IVivity and its rivals -- Aarohi Inc., Aristos Logic, Astute Networks Inc., and iStor Networks Inc. -- are competing in a market segment so new that they don’t even have ASICs from the manufacturer yet. Still, Aarohi claims design wins in a market that might not have enough major OEMs to accommodate all the players.
IVivity claims its iDISX ASICS can perform intelligent services such as provisioning, quality of service, and snapshots for 10-Gbit/s Fibre Channel or Ethernet storage networks. Qazilbash says iVivity is in the evaluation stage with six potential OEMs. Although switch vendors are the main targets, iVivity is also talking to array and blade server vendors. Qazilbash expects to have ASICs in the third quarter of this year and hopes to have an OEM deal by the fourth quarter. Intelligent chips such as iVivity’s might not make their way into the market before the middle of 2005.Still, investors seem attracted. Astute grabbed $15 million in funding in March. Aarohi pulled down $13.5 million in December, with switch vendor McData Corp. (Nasdaq: MCDTA) investing $6 million in exchange for 15 percent of the company and the right to use Aarohi’s technology in its switches (see and Aarohi Announces Funding... Again).
Qazilbash says it is too early to predict winners in the segment. “All of us are looking to become the standard."
Qazilbash says iVivity will expand slightly with the funding. He expects to increase from the current headcount of 38 to around 45 by the end of the year with the hires coming in sales, marketing, and support. There doesn’t seem to be much need for support yet, although Qazilbash says the company had about $100,000 in revenue from its field-programmable gate array (FPGA) chips last year. The FPGA chips use a less optimized architecture than ASICs but are not expected to generate enough income for iVivity to achieve profitability.
— Dave Raffo, Senior Editor, Byte and Switch
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