IBJNews

Scale Computing lands $12 million in VC funding

Back to TopCommentsE-mailPrintBookmark and Share

Scale Computing, a maker of data-storage devices that recently launched a “datacenter in a box,” has landed another $12 million in venture funding.

Leading the round is Indianapolis-based Heron Capital Venture Fund, with three Indianapolis-based firms that previously invested in tow—CID Equity, Spring Mill Venture Fund and Allos Ventures.

Also participating in the round is Benchmark Capital, a Menlo Park, Calif.-based firm that invested $9 million in Scale in early 2010 and was part of a $17 million round of funding later that year. Also involved in the latest round was Danville, Calif.-based Northgate Capital, also a previous investor.

A new investor on board this time around is Columbus, Ohio-based Reservoir Venture Partners. Investment from Heron and from Reservoir was an extra plus to Scale CEO Jeff Ready, who founded the company in California.

 “One of the challenges I think in the Midwest as far as equity investment goes is there is a lot less of it,” said Ready.

The funding will be used largely to help accelerate sales of Scale’s “HC3” product. Launched this summer, HC3 is being touted as a groundbreaking alternative to the so-called virtualization of the data center.

The virtualization trend sweeping the industry involves software licensed from firms such as VMware that that allows several operating systems to run as “virtual machines” on a single computer.

Virtualization is an alternative to investing in additional hardware such as servers. But many small and medium-sized businesses haven’t made the jump to virtualization given the cost, complexity and training requirements.

Scale is touting the HC3 device as alternative to virtualization for smaller IT departments and starts at under $25,500. It brings together storage, applications and servers into a single console. That can be one-third the cost of virtualization through the use of VMware, Scale officials say.

“Scale Computing is at the forefront of virtualization hyperconvergence,” Bill Gurley, a partner at Benchmark Capital, said in a prepared statement.

Scale already has had nearly 100 customer deployments of HC3 units in just a month after its launch, Ready said.  That’s about half of Scale’s total sales, which also include pizza-box-sized data-storage units based on the advanced parallel file system found in supercomputers.

The brisk pace of HC3 sales is in contrast to the nearly two years it took to sell an equivalent number of storage devices in the first two years of the company.  “It’s definitely surprising to the upside. I knew there was a lot of pent-up demand” for HC3, Ready said.

“In addition we have seen a lot of interest from much larger companies, which was unexpected,” Ready added.

Those include large manufacturing firms that may have 100 regional facilities.

The new venture investment is also timely as it comes just as Scale recently opened a sales office in the United Kingdom.

Company officials have been reluctant to specify sales potential, but HC3 could put Scale in a market space worth more than $5 billion a year, said Arun Taneja, founder of Boston-based Taneja  Group.

“There is a huge opportunity unfolding for us here in the midmarket with over one million companies in the U.S. looking to virtualize for the first time,” Ready said.

Scale, which employs more than 60 people and is based at Purdue University’s tech park near Indianapolis International Airport, had sales last year of about $10 million.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. I never thought I'd see the day when a Republican Mayor would lead the charge in attempting to raise every tax we have to pay. Now it's income taxes and property taxes that Ballard wants to increase. And to pay for a pre-K program? Many studies have shown that pre-K offer no long-term educational benefits whatsoever. And Ballard is pitching it as a way of fighting crime? Who is he kidding? It's about government provided day care. It's a shame that we elected a Republican who has turned out to be a huge big spending, big taxing, big borrowing liberal Democrat.

  2. Why do we blame the unions? They did not create the 11 different school districts that are the root of the problem.

  3. I was just watching an AOW race from cleveland in 1997...in addition to the 65K for the race, there were more people in boats watching that race from the lake than were IndyCar fans watching the 2014 IndyCar season finale in the Fontana grandstands. Just sayin...That's some resurgence modern IndyCar has going. Almost profitable, nobody in the grandstands and TV ratings dropping 61% at some tracks in the series. Business model..."CRAZY" as said by a NASCAR track general manager. Yup, this thing is purring like a cat! Sponsors...send them your cash, pronto!!! LOL, not a chance.

  4. I'm sure Indiana is paradise for the wealthy and affluent, but what about the rest of us? Over the last 40 years, conservatives and the business elite have run this country (and state)into the ground. The pendulum will swing back as more moderate voters get tired of Reaganomics and regressive social policies. Add to that the wave of minority voters coming up in the next 10 to 15 years and things will get better. unfortunately we have to suffer through 10 more years of gerrymandered districts and dispropionate representation.

  5. Funny thing....rich people telling poor people how bad the other rich people are wanting to cut benefits/school etc and that they should vote for those rich people that just did it. Just saying..............

ADVERTISEMENT