Fresh financing, and an acquisition

by Mark Davis, CEO

Posted Thursday, June 09, 2011 in Software Business          1 comment

Tags: startups

Yesterday Virsto announced a $12 million series B round of venture capital financing. We also announced our first acquisition.

Big milestones for a young company.

What this financing means

The investor appetite for Virsto was high in this fundraising process. Lots of interest from lots of firms, ample willingness from VCs to write significantly large checks, and on terms that are of course good for the investors but are also favorable to Virsto.

Completing this strong of a fundraising validates

• the multi billion dollar market opportunity Virsto is pursuing,
• the technology Virsto has developed that is at least 2 years ahead of anything in the market,
• the customer and partner momentum Virsto has built,
• the team Virsto has assembled,
• and Virsto's strategy for growing far beyond where we are today.

I couldn't agree more with the Sand Hill Road venture capitalists on all these fronts.  As with the previous $8.25 million raised, we'll use this capital to broaden our solutions, enter new markets, and build partnerships.

What the acquisition of EvoStor means

After we started Virsto, we heard of other small teams starting up and trying to build solutions to some of the same virtualization storage problems. Each startup had its own angle, different team backgrounds, and a few actually had some financial backing to fuel their pursuit of the opportunity.

One such company in Virsto's market space was EvoStor. They were of roughly the same vintage as Virsto.

EvoStor took a very different approach from Virsto. While Virsto chose Microsoft Hyper-V for our first entry point in the market, EvoStor focused on VMware. Virsto is 100% software, EvoStor embedded software in appliances. Virsto centered R&D in Silicon Valley, EvoStor in Melbourne, Australia. Despite those differences, there was also a lot of commonality in our belief in the need for a new storage architecture for virtualization and cloud.

We didn't cross paths that much, but we at Virsto were always aware of EvoStor.  Customers, partners, and VMware executives all raved about the slick, incredibly powerful and easy to use integration EvoStor built into the VMware platform.

When we saw the opportunity to acquire the EvoStor software engineering team and the technology they built, I knew it was worth trying to find a way to combine forces.

When we got to know each other, we found the expected (and obvious) short term synergies between the two companies' technologies. We were surprised, however, and pleasantly so, to find in EvoStor expertise, vision, and software code that will impact the Virsto longer term roadmap in significant ways.

A half dozen of the key EvoStor engineers have been working on Virsto projects since March 1, so a lot of progress has already been made. We can't wait to show you a demo! (If you want to sign a confidentality agreement with us, we have some things to show you now.)

EvoStor didn't quite get to the point of launching their products before becoming part of Virsto, so the products they were developing will never see the light of day. However, you can bet your bottom dollar (whether US or Australian) that their technology, vision, expertise, and passion will show up in Virsto products very soon.

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