Storage vendor Coraid, demonstrating that venture capital funding for IT companies is far from dried up, on Thursday unveiled a new $50-million investment in the company that included Seagate as a participant.
Coraid is a developer of Ethernet SAN technology based on the ATA over Ethernet protocol which allows any storage device connected to an Ethernet network to be seen as a c: drive by any users on the network without the need for SAN protocols.
The new venture investment in the company includes funding from its previous investors, as well as a strategic investment from hard drive vendor Seagate Technology, said Kevin Brown, CEO of Redwood City, Calif.-based Coraid.
Seagate is Coraid's first strategic investor, Brown said.
"We've been careful not to complicate things with our investors," he said. "But Seagate is our biggest supplier. They got excited about our technology and where it fits in cloud computing."
Coraid's move to the cloud was enhanced last month with its acquisition of Yunteq, a developer of orchestration and management software that helps cloud providers and enterprises build policy-driven and automated infrastructure clouds.
Being ready for such acquisitions is a part of the reason Coraid got the new funding, Brown said.
Coraid's acquisition strategy is one of looking for opportunistic buys, he said. "There are lots of little startups here (in the Silicon Valley area)," he said. "Many are suited to being acquired by larger companies. We have the funding so they know we can help them grow. And for us, it's a nice way to add some deep engineering talent."
In addition to possible future acquisitions, Coraid plans to use the new funding to expand its engineering team and to expand its market reach overseas, Brown said.
However, he said, Coraid did not really need the extra funding. The company still had funds left over from its B-round of funding last Fall, which netted the company $25 million. The company's first round of funding early last year brought it $10 million.
"Our plan is to not spend all our new funding," Brown said. "But, especially for storage vendors, customers want to know the companies they are dealing with will be around. And we want to be ready for new acquisitions like Yunteq. We already have a mature business model, and are in our sixth generation of our operating system."
November so far is turning out to be a good month for venture funding. SSD-based primary storage vendor SolidFire on Tuesday unveiled the closing of a $25 million round of venture funding the company said will help expand its reach into the cloud service provider market.
Except for a couple of cloud service providers, nearly 100 percent of Coraid's revenue comes through the channel, Brown said.