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Zadara Wows Microsoft Vet to Tune of $25 Million

Irvine-based data storage products maker Zadara Storage Inc. closed a $25 million Series C funding round led by Israel Growth Partners, which was founded by a Microsoft Corp. veteran.

It plans to use proceeds to accelerate growth by expanding worldwide sales, software development operations and engineering teams, and its service provider partner channel.

Funding is also earmarked to further develop its core offering, which is designed to reduce risks related to enterprise data storage and management.

Including the latest round, the company has raised more than $60 million since its 2011 inception.

“This will be the last round before profitability,” Chief Executive Nelson Nahum told the Business Journal.

IGP has invested in nine companies in its four-year history. It targets those with at least $10 million in annual revenue and proven differentiated technology.

Co-founder and General Partner Moshe Lichtman retired from Microsoft in 2011. He was a corporate vice president responsible for several Microsoft business lines.

Lichtman, who was among the leaders of the Windows 95 team, was head of Microsoft’s international internet sites in the late 1990s, when he quadrupled the business to become the top network in Europe, Canada and elsewhere.

“We have been impressed with Zadara’s founding team and its proven track record of building innovative, scalable businesses in the storage market,” Lichtman said in a statement.

“Zadara’s customers and partners have been extremely passionate about its technology and value proposition.”

Zadara offers cloud storage services through providers like Amazon’s AWS, Google’s Cloud Platform, and Microsoft’s Azure.

Zadara has about 25 local employees and 70 companywide.

“We intend to double in the next 12 months both here and worldwide,” Nahum said of the hiring push.

Its overseas offices are in Israel, the U.K., India, Germany and Australia. It’s experienced strong demand in the past year in Brazil and the Philippines, Nahum said, and its customer count doubled to about 200.

Revenue is projected to hit $20 million this year, up about 50% over 2017, he said.

Zadara is also prepping to release a flash-based storage offering. Flash memory can be erased and reprogrammed, and doesn’t require a power source.

Chip Heads to Space

A super-speedy computer processing chip developed by Microsemi Corp. received a key qualification from the Defense Logistics Agency that should open new business in the “most critical space missions,” the Microchip Technology Inc. unit said.

The RTG4 chip can now be used in “Class 1” flight systems, typically the most expensive and reliable missions, such as human space travel. Microsemi said its chip is the only one of its kind to meet the rigorous requirements for those missions.

The chips, known as field-programmable gate arrays, or FPGAs, are used mainly to control systems and manage data, and carry two key characteristics: They can be programmed by customers after production, and the software burned onto them can’t be duplicated after use—a safeguard against security breaches.

Microsemi entered the FPGA segment in 2010 when it bought Mountain View-based Actel Corp. for $430 million, its largest deal at the time. Those types of chips haven’t been widely used in space because radiation can reset the component, rendering embedded hardware useless.

Microsemi’s FPGAs are used in Boeing’s 787 Dreamliner and Airbus’ wide-body A380 jetliner, which can carry about 1,000 of them.

The Aliso Viejo-based company was acquired in May for $10.3 billion by Microchip in suburban Phoenix.

Automation Winner

Irvine-based Kofax Inc. picked up an industry nod for its automated software.

The company was named a leader in the Aragon Research Tech Spectrum for Workflow and Content Automation, a report that identified vendors enabling customers to “accelerate and digitize document processes and transactions.”

Robotic process automation, or RPA, is essentially software that mimics human actions to fulfill a variety of manual, repetitive tasks, such as updating a spreadsheet. Aragon Research Inc. forecasts the segment to grow from $1 billion in revenue last year to $6 billion by 2023.

Kofax’s RPA unit is its fastest-growing business line, Chief Executive Reynolds Bish told the Business Journal in an earlier interview.

The business accounted for about $45 million, or roughly 12.5%, of the company’s $360 million in annual sales last year, according to Bish.

The core technology was acquired five years ago in a $47 million deal for Kapow Software, a Palo Alto-based company that specialized in data integration software. Kapow’s annual revenue was about $15 million at the time, and it had about 150 customers.

Its RPA customer base has grown to more than 600 in the banking, insurance, supply chain and distribution, finance, accounting, marketing and customer service sectors, including Union Bank, Audi and Arrow Electronics.

Kofax has more than 21,000 customers overall.

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