Investors fight off rivals to stuff money in Nexenta's pockets

SDN is H.O.T.: 9 VCs join oversubscribed $24m funding round

It seems software-defined storage is the storage world's "cloud", and Nexenta is bang on trend. The ZFS storage array software firm's CEO, Evan Powell, is now stepping aside to become chief strategy officer in the wake of a fourth funding round of $24m, and investors must be hoping the appointment of a seasoned CEO will take the company forward to the hoped-for IPO.

Nexenta supplies NexentaStor, ZFS-based storage array software used to create enterprise class storage arrays from low-cost commodity elements by a raft of partners. These can use disk drives or solid state drives. Indeed Nexenta has just certified SMART Storage's Optimus line of SAS interface SSDs for NexentaStor.

Powell says that the percentage of the storage market taken by the major array vendors is shrinking as open or software-defined storage products, like Nexenta's, take a larger share. And this is what is exciting the venture capitalists.

The company has just received $24m in a D-round of funding. Back in January 2012 it picked up $21m in a C-round, taking total funding to somewhere between an estimated $37.5m to $47.5m. With the D-round that goes up to $61.5m to $71.5m.

Has growth slowed? In January 2012, Nexenta said it had experienced three years of growth exceeding 400 per cent year-over-year, driven $300m of hardware sales through its channel in 2011, supplied more than 4,000 customers, and tripled its workforce. It would have us understand that its growth has not slackened, not at all. In fact:

• In 2012 revenue grew 100 per cent over 2011, and Nexenta has grown in triple digits for three consecutive years
• The total customer count exceeded 5,000 and repeat sales to existing customers grew 475 per cent
• Nexenta has enabled an estimated $400 million in hardware storage sales for its reseller partners.

The D-round was over-subscribed and led by new investor Four Rivers Group, with participation from existing Nexenta investors Menlo Ventures, TransLink Capital, Javelin Ventures, Sierra Ventures, Razor’s Edge, and West Summit Capital. In addition to Four Rivers, two other new investors Presidio Ventures and UMC Capital participated. Seems like there was a rush to join in with nine venture capital funds scenting gold at the end of Nexenta's rainbow. Evan Powell, the CEO for the past five years, is taking a quarter-step back to become the chief strategy officer.

Mark Lockareff is the incoming CEO and Nexenta says his background includes leading or investing "in a number of enterprise infrastructure, software and internet companies during their key growth stages including: ParAccel, Agiliance, Softricity, Model N, Riverbed, Acopia, ProofPoint, and Facebook."

Bridget Warwick becomes Nexenta's chief marketing officer. She comes to the role from the Microsoft-acquired StorSimple, which she joined from HDS, which she joined when it acquired hardware-assisted filer supplier BlueArc. Her job is to get Nexenta's global brand awareness up, always a problem when your software runs on someone else's hardware.

Outgoing CEO Powell said: "Our task at Nexenta is simple: we must build a company that is up to meeting the enormous opportunity of leading the transformation of the storage industry." Gee, don't think small Evan.

Nexenta sees itself as changing from noisy and disruptive classroom genius to a trusted enterprise partner, kind of, we think, like Red Hat is today. The penguin's progress is probably an inspiration to this wannabee Red Hat of storage. ®