Pivot3 closes $25m in new funding
PALO ALTO, Calif.—Pivot3, purveyors of IP SAN storage offering “serverless computing,” has closed on a fourth funding round of $25 million. Perhaps more notable than the money is the round’s lead investor, Focus Ventures, which has in the past funded storage companies EqualLogic (acquired by Dell) and Isilon (IPO). Their experience in the market, said Pivot3 co-founder Lee Caswell, has already opened new doors for the company—quite literally: Some former EqualLogic employees have joined Pivot3 and opened a Tokyo office, thanks to connections made through Focus.
“It’s kind of that instant access to channels of distribution, particularly outside the United States,” said Caswell, “that can get us in and connected really fast. They don’t like debugging a product. It has to be proven in the field, mature, so that it’s just a question of applying dollars to the sales side to scale it out.”
Pivot3’s last round came in 2008, when Mesirow Financial Capital Partners led a $24 million round, but Caswell said the company is in a different place now.
Pivot3 is reporting that it tripled its revenue in 2009, doubled its sales force, and did all that without any sales outside of the United States. Further, a recent IMS Research report named Pivot3 as the market leader in the IP SAN portion of the video surveillance storage market, and predicted year over year growth for that segment of the market of 60 percent. As the company aims for an eventual IPO, Caswell said Pivot3 was able to attract funding because its current revenue and stability makes it a relatively safe bet, but the market growth and its status in that market offers investors like Focus a potential big score.
And if you’re thinking $25 million is a big number for a fourth round in the video surveillance market, you’re not wrong to wonder if there’s something to look at there. Part of the round will go toward beta testing Pivot3 solutions for other, non-surveillance markets. “Up till now, if people asked if they could use our storage for something else, we’ve said, ‘no,’” said Caswell. “We’ve focused on surveillance. But now we’re going to add some resources to open up some other opportunities, so there will be a beta through the summer time frame and then we’ll announce the market we’re going into in the fall.”