Business & Tech

Data-storage upstart Kaminario nets $75m in latest fund-raising

Investors have poured another $75 million into Kaminario, a privately held seller of data-storage systems that competes with tech giants such as Dell Technologies and Hewlett Packard Enterprise.

Kaminario, founded in 2008 and based in Needham, has now raised more than $200 million from investors, including Boston’s Globespan Capital Partners. Kaminario sells data center storage devices based on solid-state flash memory, a next-generation technology that replaces older spinning-disk systems.

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Many companies sell similar “all-flash array” devices to large corporate data center clients. But Steve Duplessie, a senior analyst at Enterprise Strategy Group, said Kaminario stands out because of the software it uses to control those systems.

In a typical data center, Duplessie said, IT officials have to tie each new data-storage device into their existing equipment to ensure older systems can effectively work with the new gear.

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Kaminario’s operating system cuts out all of that configuration and system management, letting an IT department add storage quickly without hours of extra work, he said.

“The system’s a borg. It’ll reconfigure itself to take advantage and suck in all the extra resources you provided to it,” Duplessie said. “You’re never managing more than the thing that you bought.”

Kaminario’s chief executive, Dani Golan, said the company has hundreds of customers, including the Spanish telecom Telefónica, online travel provider Priceline Group, and speech-recognition software developer Nuance Communications. Kaminario, which has research and development offices in Israel, has about 275 employees.

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Golan declined to discuss sales figures, but Kaminario is competing in a huge market for behind-the-scenes tech equipment. Dell, which purchased EMC last year, reported more than $3 billion in sales for its storage segment in the third quarter. Hewlett Packard Enterprise reported about $780 million in storage sales for the same quarter.

Duplessie said Kaminario’s ability to win large corporate customers amid those deep-pocketed competitors proves its technology has impressed corporate IT managers. That has spurred competitors to develop competing products and might make Kaminario a buyout target, he said.

“It’s still such a nascent market that it’s up for grabs, for sure. Companies like Kaminario tend to get bought for what can be an awful lot of money,” Duplessie said.

The large investment round could keep Kaminario private for some time, an indication that the market for tech-company initial public offerings is still not ready to thaw from a historic lull. The company’s other investors include the private equity firm Waterwood, venture firms Sequoia Capital and Pitango, and Silicon Valley Bank.

Golan said he was happy to take advantage of plentiful private equity cash, avoiding the public scrutiny and regulatory overhead that comes with operating a public company.

“We want to stay private as long as we can,” he said. “We believe that in the next few years, this is an advantage.”

Curt Woodward can be reached at curt.woodward@globe.com. Follow him on Twitter @curtwoodward.
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