Startups Bask in Summer Sums

The dry spell in storage startup funding seems to be abating, as backup startup Revivio Inc. and IP SAN switch vendor StoneFly Networks Inc. reported receiving a combined total of nearly $33 million today (see StoneFly Banks $12M Round and Revivio Lands $20.7M Series B).

Today's announcements follow BlueArc Corp.'s news last week that it had pulled in $47 million in additional funding, which the company expects to take it to breakeven in 2004 (see BlueArc Wallows in $47M Haul).

"Were seeing some of the VCs start to spend a little bit more money," says Enterprise Storage Group Inc. analyst Steve Kenniston. "It looks like the purse strings are opening up a bit."

How much are they opening up? Revivio, for starters, announced today that it has landed a whopping $20.7 million in a second round of funding. The round, which brings the company’s total funding to data to $30.5 million, was led by new investor Globespan Capital Partners. All three of the company’s previous investors, Bessemer Venture Partners, Charles River Ventures, and Flagship Ventures, also participated in the round.

"It was very, very quick," says Kirby Wadsworth, Revivio’s VP of marketing. "Globespan [committed to participating in the funding round] five to six weeks after we started sending the story around... We’re thrilled both by the speed and the players involved in the deal."Here's Revivio's story: The startup says its appliance offers continuous backup and easy point-in-time restore. Using timestamps, the company claims users can continuously backup any changes made and restore data blocks from not only any location on a disk but also from any point in time (see Revivio Starts Talking Continuously).

The Lexington, Mass.-based company, which says it currently has a handful of Fortune 500 companies beta-testing its appliance, says the additional cash will come in handy as it expands product development and prepares to start shipping the appliance sometime this fall. In the short term, at least, the company says it does not expect to expand beyond its present headcount of 45.

A growing number of companies have recently been jumping on the continuous backup bandwagon, including Storage Technology Corp. (StorageTek) (NYSE: STK), TimeSpring Software Corp., Vyant Technologies Inc., and XOsoft (see Data Protection, XOsoft Turns Back Time, StorageTek Hears an Echo, and Vyant Ships Rapid-Recovery App).

While Wadsworth acknowledges that Revivio’s technology is similar to that of other players in this space, he insists that its approach is unique. "The technology at the core is similar. We’re all working on the same idea," he says. "But our appliance is enterprise-class... It’s scaleable to hundreds of thousands of transactions, and certainly hundreds of terabytes." [Ed. note: It's obviously buzzword-compliant, anyway.]

But before the appliance actually hits the market, it’s difficult to compare its performance with that of other vendors, says Kenniston. In any event, he notes, "We’re seeing a bit of a flurry of activity around these continuous recovery products... It’s goodness for all of these folks that there’s buzz around this."StoneFly, meanwhile, is playing in another emerging market that has received a lot of attention lately. The company, which makes IP-based storage provisioning appliances, announced today that it has received $12 million in a C Series round led by Rustic Canyon Partners. The round brings StoneFly’s funding to date to $34 million. Existing investors, including Crescendo Ventures, El Dorado Ventures, and Palomar Ventures, also participated in the round.

The San Diego-based company, which says it has more than 60 customer sites using its Storage Concentrator family of switches, said it will use the new cash infusion to continue product development and corporate growth, as well as to strengthen partnerships and sales channels.

Recently, says Kenniston, the market seems to have grown more confident in iSCSI, which allows companies to use their standing Ethernet infrastructures to enable IP SANs. One of the big drivers for this technology is that Microsoft Corp. (Nasdaq: MSFT) last month released the final version of its iSCSI driver for Windows (see Microsoft Sparks iSCSI Liftoff and iSCSI Gets Go-Ahead).

StoneFly also announced that it has hired Bob Preston as its VP of marketing and Bob Boggan as director of strategic business development [ed. note: The Bobs!]. In addition, the company said it has moved its headquarters to a larger, 15,000-square-foot facility in San Diego to support its growing staff, currently comprising 45 employees, and also opened an engineering center in San Jose.

— Eugénie Larson, Senior Editor, Byte and Switch