When Pure Storage pocketed $150 million in funding last August, CEO Scott Dietzen said that gigantic round would fuel rapid growth for the all-flash array vendor in the face of increasing competition from EMC and other large storage vendors.
Apparently, the $150 million wasn’t enough to fund that growth spurt. Today Pure closed an even bigger round, picking up another $225 million to bring its total funding to $470 million. That’s either a lot of growth or a lot of money being burned.
In his blog today and in an interview with Storage Soup, Pure Storage president David Hatfield explained why the company went back so soon for so much money. He said it wasn’t out of necessity because Pure has not yet spent most of its last round and could be cash-flow positive if the leadership team wanted that. But Pure wants to keep growing its engineering, international sales breadth, brand support and channel.
Hatfield said current and new investors were eager to pump more money into Pure, so Pure took it.
The title of Hatfield’s blog includes the term “Building a War Chest,” and that tells you what you need to know about the all-flash storage market today. EMC, NetApp, IBM, Hitachi Data Systems (HDS), Hewlett-Packard and Dell are all pushing flash either in hybrid or all-flash systems. Then there are the all-flash pioneers such as Pure, Nimbus and Violin Memory vying to push spinning disk out of the enterprise. It’s easily the most competitive storage market today.
As for growth, Hatfield said Pure is “adding two or three people a day,” including new memebers of its large executive team. On the product front, Pure is in beta with replication, its major missing software piece. Hatfield said there are plans to continue to scale up the platform to reach hundreds of TB on a system, increase interoperability with third-party software applications and move beyond tier one storage.
On the customer front, Pure claims is revenue grew 700 percent in 2013 over 2012 and has been increasing more than 50 percent sequentially each quarter. Pure said it shipped more than 1,000 FlashArrays in 2013.
Hatfield said despite the large vendors’ talk about flash and their new all-flash systems, they are still committed to spinning disk while Pure is pure f lash. “EMC would rather sell a $1.5 million VMAX instead of a $300,000 [all-flash] XtremIO,” he said. “We’re competing with hybrid models. They’re selling disk first, then flash as a tier. We have a two-plus year lead on technology. As [legacy vendors] try to close the technology gap, they have a business dilemma. Their multi-billion dollar disk franchise is at risk. We have the ability to attack it, and not feather in flash as a performance tier.”
They have a huge war chest to fund that attack. The latest round included new investor Wellington Management Company as well as previous investors T. Rowe Price Associates, Tiger Global, Greylock Partners, Index Ventures, Redpoint Ventures, and Sutter Hill Ventures.