Western Digital Offshoot Aristos Raises $15.5M
By MICHAEL LYSTER
Aristos Logic Corp., a Foothill Ranch-based chip designer that came out of Western Digital Corp. in 2000, has raised $15.5 million to see it through next year and launch its first product by June, company officials said.
The venture funding, by New York-based JPMorgan Partners, San Francisco-based TPG Ventures and the venture arm of Milpitas-based Quantum Corp., brings Aristos’ total raised to $33.5 million, according to Chief Executive Anil Gupta.
The company’s $18 million first round of funding closed in early 2000 and was backed by Germany’s Infineon Technologies AG.
Aristos designs chips that aim to speed the flow of data over storage networks–computers that banks, Internet companies, retailers, and government agencies use to store and retrieve data.
The company plans to use the latest funding for continued product development and marketing and sales, Gupta said.
Aristos’ first product is set to be out in the first half of 2002, he said. Dubbed FibreSlice, the product is a controller chip that manages access to storage devices. LSI Logic Corp. is set to produce the chip, according to Gupta.
As possible customers, Aristos is eyeing storage device makers such as Sun Microsystems Inc., EMC Corp. and IBM Corp. Storage component makers such as Aliso Viejo-based QLogic Corp., San Diego’s JNI Corp. and San Jose-based Brocade Communications Systems Inc. are potential rivals.
Aristos could seek a third round of funding in early 2003 aimed at building up production and managing inventory, Gupta said. As far as a public offering, “it’s a little early for us to be talking about that,” he said.
“We believe in the good old fashion way of doing IPOs where we want significant revenue and margins generated before we go that route,” Gupta said.
Raising money this time around was a “long process,” according to Gupta. Aristos’ vice president of business development and marketing, Vipul Mehta, said venture capitalists are scrutinizing potential deals harder these days.
One advantage Aristos has is that its market–network storage–turned downward later than other technology sectors and hasn’t been hit as hard.
One thing that sold investors was the backgrounds of Aristos’ executives, Mehta said. All of Aristos’ top executives hail from Lake Forest-based Western Digital, with the exception of Chief Financial Officer Fred Barnes, who previously worked for Tustin-based VillageEDOCS Inc.
During his time as Western Digital, Gupta helped start the disk drive maker’s Singapore design center and served as a director of the facility.
Western Digital still owns part of Aristos but is not a venture backer of the company, Gupta said. Aristos broke off as part of Western Digital’s strategy to spin off some of its internal business to focus on the disk drive market. Other offshoots include SageTree Inc., a maker of supply chain management software, and Keen Personal Media Inc., which makes set-top box products.
Aristos’ counts 61 employees, including about 50 engineers. Many of them have worked for companies such as Western Digital, QLogic and Texas Instruments Inc. The company plans to add a vice president of sales but beyond that doesn’t plan to hire more people until late 2002, according to Gupta.
The company has 20,000 square feet of space in Foothill Ranch, enough space to double its headcount, officials said.
