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9/22/2006
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Compellent Gets $15M In Venture Funds, Weighs IPO

Next month, the vendor of tiered storage systems plans to add remote replication and storage resource management features to its product line.

Compellent Technologies has an extra $15 million in the bank thanks to a new round of funding.

It's money the Minneapolis-based developer of technology for implementing automated tiered storage really doesn't need to get to sustained profitability, but it will help the company as it moves towards a possible initial public offering next year, said Phil Soran, president, CEO and founder.

"We're raising money when we don't really need it," Soran said. "It shows valuation in the company, and gives us money for the fight coming."

That fight includes a possible IPO, Soran said. "We're on the path," he said. "In 2007, we'll establish solid profitability, and see what happens. Sustained profitability has come a little earlier than I planned."

With this round of financing, the company's fourth since 2002, Compellent has received a total of over $53 in venture capital, Soran said.

"Our competitors have raised a lot more money," he said. "It's a validation of our business model that we can do so well. There are seven or eight competitors in the SATA, iSCSI, high-performance computing, and NAS space that have raised $150 million to $250 million each."

Compellent's funding came from a number of venture capital sources, including The Nomura Group, but none has come from strategic investors, Soran said. "That's good news," he said. "A lot of times strategic investors come with strings attached that can hamper your business model."

That business model is based on going to market exclusively through the channel from the beginning. In the year before the company came out of stealth mode, it invited a number of solution providers to bring customers in for meetings to discuss product requirements and have its indirect channel set up before it started selling products.

Compellent currently has about 105 solution providers and over 400 customers worldwide.

The company most recently introduced an entry-level version of its tiered storage technology aimed at helping solution providers provide a low-cost information lifecycle management (ILM) solution.

Next month, it expects to add remote replication and storage resource management capabilities to its product line, Soran said.

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