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Reduxio Closes In On New $32M In Funding, With The Lead Investor Tied Closely To Amazon

The company, which specializes in hybrid flash and disk storage, wants to expand the definition of "hybrid" to include the cloud, and may look toward its top investor, a venture capital firm, for a potential link with AWS.

Hybrid flash and all-flash storage technology developer Reduxio Systems said Monday it has closed $22.5 million as part of a new C-round of funding it expects will eventually hit about $32 million, with the lead investor a close partner of Amazon.

The new funding round, once finished, will bring total funding to $65 million and double the company's evaluation, said Mike Grandinetti, chief marketing and corporate strategy officer for the San Francisco-based company.

Grandinetti declined to discuss Reduxio's evaluation or specific details related to the company's finances. "But in this tough VC [venture capital] environment, this is s pretty big endorsement of our business," he told CRN.

[Related: The 10 Coolest Flash Storage And SSD Products Of 2016]

The lead investor in this round, London-based C5 Capital, is focused on the cloud, cyber security, and data analytics, and has a strategic partnership with Amazon Web Services, which includes helping bring AWS to the European and African markets, Grandinetti said.

Reduxio offers all-flash storage and hybrid-flash storage arrays, but is looking to expand the definition of "hybrid" to include the cloud, Grandinetti said.

"That's the future of hybrid," he said. "It means much more than something inside the box. It includes moving data to public and private clouds. That's why we brought in a venture capital firm close to Amazon."

Coincidentally, the next version of Reduxio's technology, currently in beta, will include cloud connectivity, Grandinetti said. However, he declined to discuss whether that includes connectivity to the Amazon cloud.

In the meantime, Reduxio has done well with hybrid-flash storage despite the falling price of all-flash storage, Grandinetti said.

Hybrid-flash arrays do well because of the cost differential between flash storage capacity, which costs 26 cents to 27 cents per gigabyte, versus hard disk capacity, which costs about 5 cents per gigabyte, he said. "It's still a significant enough variable, so people with budget concerns consider hybrid flash," he said.

Reduxio has about 100 customers that have purchased about 150 systems as of last year, and not a single customer has asked for all-flash storage, Grandinetti said. "We can do all-flash," he said. "And there's no question, if a customer asks for it, we can do it. But by then we'll be on our next architecture."


Grandinetti said Reduxio expects the new funding to be enough for the foreseeable future. "It gives us a few years of runway," he said. "We'll certainly get to cash-flow positive in that time. This should be the last round before getting to cash-flow positive."

It's good to see Reduxio looking at cloud connectivity and a possible closer relationship with AWS, said Ron Salazar, general manager at MR2 Solutions, an Irvine, Calif.-based solution provider and Reduxio channel partner.

"The days of stand-alone storage are coming to an end," Salazar told CRN.

Reduxio has been a good partner, and done a good job of taking care of partners, Salazar said. "Reduxio is still in 'puberty' mode," he said. "But when it becomes an adult, it will be looking for bigger customers to help its growth. So it will be even more channel-focused."

The new round of investment will help partners like MR2 approach clients, Salazar said.

"It brings Reduxio confidence and credibility," he said. "It shows the company is one that a lot of big investors believe in."

Reduxio is 100-percent channel focused, Grandinetti said. "The only way for us to grow is to rely on partners," he said.

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