Pivot3, a 13-year-old "start-up" providing storage-centric hyper-converged infrastructure (HCI) solutions for video surveillance, has announced $55 million equity and bank financing. “The funding will accelerate the company's growth and enable it to bring to market the most extensive suite of hyper-converged and flash storage solutions with predictable performance that is available today”, they say.
Hyper-converged platforms are nearing a $10.6 billion addressable market in the United States alone, as more organisations are drawn to more efficient internal processes and operations management. The flash storage market is in a similar hyper-growth rate, suggesting that flash storage will reach a $13.5 billion market value by 2018, according to Technology Business Research.
The need for innovative scalable storage solutions is in a large part driven by the growth of the Internet of Things, Smart Cities and Smart Buildings. As video management systems (VMS) become a more integral part of buildings, for example, the masses of data created demands a capable and reliable storage solution. Then consider the wider implications for data centres, security, education, transportation and so on, and you begin to understand the sectors growth.
Pivot3 is not alone however; in fact it has as many as 18 well-funded, well-established competitors. Other all-flash and hyper-converged vendors include; EMC, Cisco, Dell, HDS, HPE, Huawei, GridStore, Kaminario, Lenovo, NetApp, Nimble Storage, Nutanix, Pure Storage, SimpliVity; Tegile, Tintri, Violin Memory and X-IO. Yet the maturing start-up is getting a significant portion of the attention and a continued stream of funding.
This week’s $54.6 million, its seventh round of funding, is part of just over $247 million of funding since its establishment. Argonaut Private Equity and S3 Ventures are providing the majority of funding for this round. The strong support for Pivot3’s strategy and growth record from existing investors as well as the interest from new investors are strong indicators that Pivot3’s is offering something to rival or surpass its competitors.
“We are dedicated to investing in market-leading companies that deliver innovative solutions for real world problems, and Pivot3 exemplifies our mission”, Steve Mitchell, a managing director at Argonaut Private Equity, said. "Hyper-converged infrastructure and all-flash storage are two emerging markets that are experiencing unprecedented growth. Pivot3 is poised to become an unparalleled presence with truly differentiated solutions that addresses the cost and complexity of the modern IT data centre".
As part of this financing, Pivot3 will move its banking relationship to Square1 Bank, an emerging leader in technology financing. “The insight to future technology needs and the aggressive movement to market opportunities that we see in Pivot3 make it a great customer for Square1 Bank and our team of technology bankers”, said Ken Fugate, founder and managing director of Square1 Bank. “We expect to grow over the years with them”.
In January this year, Pivot3 announced the acquisition of NexGen Storage, a leading provider of PCIe flash arrays with storage Quality of Service (QoS) and dynamic provisioning capabilities.
Pivot3 and NexGen's combined capabilities allow customers to apply the appropriate infrastructure and priority to each workload, application or business service according to its business value and to guarantee the suitable level of service. The latest round of funding will accelerate the integration of the combined NexGen and Pivot3 product set, development of breakthrough new products and advancement of the go-to-market plan.
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Pivot3 has also been busy since the NexGen acquisition. On February 18th the company announced a partnership with IT-as-a-service firm, Gotham Technology Group, who focus on delivery of applications and data to an the mobile workforce. On February 23rd Pivot3 partnered with Adapture, an IT lifecycle solutions provider. March 8th saw another alliance, this time with T5 Data Centers, a leading national data centre owner and operator, and just last week they announced a partnership with Mavenspire, a provider of data centre solutions and services for mid-market and enterprise businesses.
"Companies today need today a dynamic, agile and flexible IT infrastructure that can provide them with a competitive advantage as well as lower total cost of ownership”, said Ron Nash Pivot3’s CEO. “Pivot3 is tackling this challenge head-on by initiating a market-wide transformation that will expand the traditional notion of hyper-convergence and high-performance storage and allow customers to effectively and efficiently manage IT and adapt more quickly to emerging business challenges".
Pivot3’s success in fundraising will undoubtedly help their activities in this fast growing sector. However, the calibre of their competition suggests a tough road ahead for the "not-so-start-up" talking up a big game.