SimpliVity Lands $175M Series D, Sets Sights On Midmarket Customers

The fast-growing, hyper-converged infrastructure startup SimpliVity said Tuesday that it raised $175 million in series D funding, which it plans to use to continue targeting midmarket customers through its channel partners.

"The midmarket is ripe for transformation," said CEO Doron Kempel, during a media conference call on Tuesday. "The strategic imperative is to continue to broaden the scope of enabled loyal VARs who can reach the midmarket and higher end."

SimpliVity, Westborough, Mass., has now raised a total of $276 million and will continue to emphasize finding, enabling, motivating and training partners, Kempel said.

[Related: SimpliVity CEO Urges VARs To Dive In With Hyper-Converged]

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The latest funding gives SimpliVity a valuation of more than $1 billion. According to Kempel, SimpliVity grew revenue by more than 500 percent year-over-year with 100 percent of sales going through the channel into 2014. The company also expanded resellers into 50 countries and grew its employee base to more than 400 worldwide.

SimpliVity's flagship OmniCube product combines compute, storage backup and deduplication, networking, WAN optimization, and other enterprise technologies on x86 server hardware.

Barry Shevlin, CEO of Vology, a Tampa, Fla.-based solution provider and SimpliVity partner, told CRN that he's seeing growing demand for hyper-converged infrastructure from his customers.

"It simplifies the way people can monitor, manage and maintain their infrastructure," said Shevlin.

Shevlin said SimpliVity uses the popular VMware VCenter platform, so the learning curve for engineers to learn the technology is easy.

"I expect that Vology is pretty well positioned because we've embraced their product line; we've gained some traction with it," he said.

Kempel said SimpliVity will use the funding to "push the technology envelope" and enable the technology to run in a wider range of customer environments.

"There are capabilities that this technology enables that have not been possible up until now and we need to continue to push those capabilities -- our customers are pushing us," said Kempel.

Shevlin said partners are excited to see how well-funded SimpliVity has become and hopes their pipeline continues to grow for the channel.

"I can't recall another vendor that we've worked with in quite this situation, so it's pretty exciting," said Shevlin. "When we look at the newer vendors, it comes down to the quality of the team they're putting together, so with Doron at the helm and the people he's surrounding himself with and putting into the channel, I think they're going to do pretty well."

Waypoint Capital, a business enterprise headquartered in Geneva, led the series D funding round, with prior investments coming from Accel Partners, Charles River Ventures, DFJ Growth, Kleiner Perkins Caufield & Byers and Meritech Capital Partners, according to a release.

During the conference call, Frederic Wohlwend, chief information and technology officer at Waypoint, said they invested in SimpliVity because the company's superior hyper-converged infrastructure is years ahead of the market that will "revolutionize" the industry.

"We truly believe SimpliVify will disrupt the industry and continue to lead for quite some time the hyper-convergent market," said Wohlwend.