Avamar Closing In on $15M in Funds for Marketing Push
By ANDREW SIMONS
Irvine-based Avamar Technologies Inc. says its about to close on a new round of venture capital funding.
Avamar, a provider of backup software for data storage, hopes to close a deal for as much as $15 million in the next couple of months, said Kevin Daly, the company’s chief executive. It would mark Avamar’s biggest round of funding.
Since its 1999 founding, the software maker has raised $22.5 million, including last April’s $12 million round.
Avamar’s existing investors include Menlo Park’s Lightspeed Venture Partners and Benchmark Capital, and Andover, Mass.-based CMGI Capital.
All three firms are expected to invest in the next round, Daly said. Avamar also is looking for a fourth investor.
“We’ll look for an external investor,” Daly said. “External validation of the company would be useful.”
The company plans to use the money to hire marketing and sales staff. Avamar has 50 workers,about 70% of them are engineers.
The company has four marketing workers and says it needs more.
Avamar’s software allows companies to easily back up large amounts of data without tying up the pipes of massive storage networks.
The company says its software, which is set to be sold along with data storage servers as a single product, is a cheaper, more efficient way for banks, distributors and government agencies to back up data.
The next six months will be crucial for Avamar as it looks to sign up “early adopters” of its software. Those companies testing early editions of the software are important to help find and fix bugs normally found in software designs.
Early users of the software also could be the company’s initial customers.
“We’re at that delicate stage where we’re just developing the customer traction,” Daly said.
Avamar’s good fortune with venture capitalists is something of a bright spot in a down sector. Many storage companies have been slammed on Wall Street.
Waltham, Mass.-based StorageNetworks Inc., for one, is down 73% to 90 cents a share in the past year. StorageNetworks has cut more than a third of its staff to 215 workers in the past year and a half
“Investors have been burned,” Daly said.
A bright spot: Lake Forest-based Western Digital Corp., whose shares are up nearly 40% in the past year to 7.40 at recent check.
Meanwhile, venture firms are taking a closer look at fledgling storage companies.
Mountain View-based 3Ware Inc., a maker of network packet switching devices for storage controllers, raised $26 million earlier this month. And Longmont, Colo.-based storage software maker CreekPath Systems Inc. raised $16 million in November.
Interest in OC technology startups mainly has focused on communications chips and wireless technology startups.
In December, Irvine-based SolarFlare Communications Inc. closed a $13 million second round of venture funding. Corona del Mar’s Miramar Venture Partners and Foundation Capital and Sequoia Capital, both of Menlo Park, took part in that round.
Irvine-based wireless chip designer Morpho Technologies Inc. received an undisclosed investment from Motorola Inc. and other unnamed investors in October. The company said earlier this year that it had been aiming to raise $10 million.
And Irvine chip designer U-Nav Microelectronics Corp. raised $10 million in a second round of venture funding in August, bringing its total investment to $14 million.
Avamar last July grabbed Daly, who once headed Quantum Storage Solutions Group, a unit of Milpitas-based Quantum Corp.
Daly is a fixture in OC’s technology industry. He headed up ATL Products Inc. when it still was part of Anaheim-based Odetics Inc. Daly oversaw ATL’s blockbuster public offering in 1997 and subsequent buy by Quantum.
For a while, Quantum Storage Solutions went by Quantum/ATL before adopting its present name.
Daly, who had headed up the division for some time, was replaced by Lawrence Orecklin last year.
