Ramana Jonnala, co-founder and CEO of Convergent.io epxlains that virtualization has led to companies using a lot more storage, experiencing latency and also confusion about what information is stored where. The aim of Convergent.io is to build a product (is it a system? software? Jonnala won’t say) that virtualizes and then adds intelligence to storage networks and ensures that the right storage is used for the job. This could mean sending archives to slower hard drives but real-time transactions to faster SSDs, all based on policies the customer sets.

But none of this is real yet, and frankly, software defined anything is the marketing phrase du jour. Storage is just now getting in on the hype. Just yesterday I reported on Nutanix, which raised a $33 million third round for its software-defined storage appliance.

That’s not to say that storage in virtualized or webscale environments doesn’t need a little innovation, but just that in Convergent.io’s case Jonnala isn’t saying what that innovation is until next summer when he expects to release the first product. The funding will help him hire the right people to meet that deadline. Convergent.io currently has 16 employees and expects to hire more engineers thanks to this round.

Jonnala is a veteran of XenSource and Veritas and is working with Co-founders Andrew Warfield and Keir Fraser who also worked at XenSource.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• A near-term outlook for big data
• Quality of the cloud: best practices for ISVs
• Dissecting the data: 5 issues for our digital future

Frankly, today’s new announcement is just an affirmation of what has been reported in the past, ad nauseam. Sarah Lacy of TechCrunch had first reported of the likely investment on May 30, 2011, and speculated that the company was valued at close to a billion dollars. We have heard similar valuation metrics as well. As we previously reported, the company is on track to take in $25 million of net revenues during the current year and is also said to be doing flow-through revenues of around half a billion. The company itself says that two million nights have been booked using the system. The company is experiencing rapid growth in overseas markets. The New York Times  reports that the company is racking up about 10,000 guests a night.

AirBnB is an amazing story of enterprenurial grit. More importantly the company is at the leading edge of what I have described as a new peer-to-peer (or person-to-person) economy. This p2p economy is an area of much interest to me. Here is a video interview with AirBnB CEO Brian Chesky, who shared his story with me a few months ago. In addition, Colleen Taylor interviewed his co-founder, Joe Gebbia, and I have embedded that interview as well.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Flash analysis: the tech startup investment environment, Q3 2011
• Crowdfunding’s rapid growth and future opportunity
• Web startups: How to guard against security breaches

The fundraising crunch doesn’t seem to be hitting venture capital firm Andreessen Horowitz, which announced today that it has raised $650 million for a second fund, more than doubling the $300 million it raised 16 months ago.

The new fund will continue to focus solely on computer science and will be stage agnostic, with the freedom to fund seed rounds as small as $50,000 up to larger growth rounds of up to $100 million — twice the limit of the previous fund. General partner Marc Andreessen said half the fund will be focused on growth opportunities and he welcomed the chance to pursue bigger deals, similar to Andreessen Horowitz’s $50-million bet on Skype. He said that while he is not opposed to seed deals, they are less attractive these days with the glut of VCs and angels looking at opportunities there. “There are more seed investors putting more money to work, there are a lot more deals and valuations have gone up while the quality has gone down,” he said. “The opportunity is diminishing relative to a couple years ago.”

This second fund gives the fledgling firm even more momentum in Silicon Valley and shows the power of Andreessen, who some have dubbed the King of Silicon Valley. Andreessen Horowitz has invested in 28 companies, including Foursquare and Zynga, and owns 5 percent of Skype, which is preparing for an IPO. Andreessen sits on the board of Facebook, eBay and HP and was previously an active angel investor with bets on Twitter and Digg.

Andreessen Horowitz will be looking broadly at computing but will be keeping an eye on mobile, infrastructure and cloud-investment opportunities, as well as potential deals with storage and networking companies. Andreessen said the firm also wants to entertain fresh ideas from entrepreneurs who may be looking at opportunities outside of the current hottest areas. Interestingly, Andreessen said he believes the U.S. is ripe for a return of consumer electronics companies, which he is also on the lookout for.

While other firms have struggled to raise funds, Andreessen said his firm was able to raise $650 million in three weeks, tapping all of the existing investors from the first round — which took three months to complete. He said it shows that limited partners are willing to put their faith in top firms that can access good entrepreneurs and strike quality deals. “The reality is there are 10-20 funds that have good returns while every other VC is over-funded with too much money chasing opportunities,” Andreessen said. “Investors are getting tougher. It’s tough for people with 10-15 years of bad returns to get money but investors are excited about firms that they think can get good deals.”

Related content from GigaOM Pro (sub req’d):

• What the VC industry upheaval means for startups?
• Lessons From Twitter: How to Play Nice With Ecosystem Partners
• What We Can Learn From the Guardian’s Open Platform

Post and thumbnail photos courtesy of Flickr user jdlasica