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Summary:

The flash storage maker’s latest raise will fund its enterprise storage push and probably accelerate its IPO plans.

Flash storage maker Pure Storage just netted $225 million in new funding, bringing its total cash trove to a whopping $470 million, with a claimed valuation of more than $3 billion. This comes just nine months after Pure Storage raised $150 million in Series E funding.

The money will fuel the company’s undeniably expensive enterprise push and maintain what it calls a two-year head start in technology.  It may have gotten the jump on older, established rivals, but they’re all in this game now and that means the cost of customer acquisition will rise. Last fall, storage market leader EMC launched its own flash storage push, using technology acquired with XtremIO.

While Pure Storage, Nimbus Data and other rivals tout the use of fast Flash for nearly every need, there is not 100 percent agreement that this is really necessary. An array of startups and legacy companies, including EMC, also push hybrid arrays that pair traditional spinning disk with flash as needed. Spinning disks are not as fast as flash, but they’re considerably cheaper.  For more context on this, check out last year’s Structure talk with Pure Storage CEO Scott Dietzen (pictured above) and DataGravity CEO Paula Long and our Structure podcast with Long.

Pure Storage’s new cash, which comes in part from new investor Wellington Management Company as well as previous backers T.Rowe Price Associates and Tiger Global, may also come in handy to fund a multi-front legal spat with EMC, which sued some former employees who joined Pure. And given this huge cash infusion, Pure will have to get more specific about its long-stated IPO plans. Given all this investment, you’ve got to wonder how much of a stake the founders still have in the company.

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  1. Barb, you and Gigaom obviously carry water for Big Data companies (Hortonworks raising their huge round, multiple stories on Cloudera’s round) AND of course you have an event that targets the data market.

    BUT for a storage company taking a huge round in an obviously growing space (as validated by market share leader EMC’s entrance into the market) and this is called “Crazy dough?”

    Really? You know what’s crazy? Big data valuations. Yet you pine over their valuations and hock your big data shows. Rob Bearden, in your article says “Hortonworks can be a $1 billion entity in the 2017-2018 timeframe.” – A valuation 3+ years from now while the Flash/Hybrid storage players are going public NOW (Nimble, Violin) with public market valuations.

    You REALLY think Pure’s valuation is “crazy?” – you have it backwards.

    1. Um, i agree that big data valuations are nutty too, but i’m not covering them here.

  2. You (and Gigaom) OBVIOUSLY carry water for the big data space. Normally there is nothing wrong with bloggers backing/covering a niche since there is a symbiotic relationship (ala Curt Monash). But as Gigaom, with broad coverage across all of the enterprise, it’s so blatantly skewed and awkward.

    From all the positive coverage you give to Hortonworks and Cloudera on their recent rounds (podcast, multiple articles, Structure, etc). Yet, you call this recent round by Pure Storage “Crazy Dough?”

    Let’s look at some points:
    1. Your article: “Bearden said Hortonworks can be a $1 billion entity in the 2017-2018 timeframe” – This is 3+ years from now.

    2. Pure Storage and Nimbus “tout the use of fast Flash for nearly every need, there is not 100 percent agreement that this is really necessary.” You’re using Paula Long’s statement and hyper-extending her opinion. Your “appeal to authority” is thin at best. When a disk vendor with 80% marketshare pushes a competitive technology that will cannibalize their own marketshare, there is something there (EMC acquires and pushes XtremIO)

    3. You end your article with a question on the founder’s stake in the company. How is this germane to “crazy dough” – whether they have a 1% or 30% stake, what does that matter to the valuation of these players? In the recent Gigaom coverage of Hortonworks/Cloudera/Platfora, did you ask or even discuss in your coverage how much Bearden has in Hortonworks, Mike Olson has of Cloudera or Ben Werther of Platfora?

    I get it, you’re not Recode or TechCrunch – sites where I feel the news is more “news.”

    If you (and Gigaom) is shooting to be Pando Daily or attempting some light snark (ala The Register), this is NOT a good look for you.

  3. wow comments from Beau and BigData fan remarkably similar.

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