Xiotech has closed on $40 million in new funding to help it bring to market storage technology acquired from Seagate.
The funding round, “in excess of $40 million,” was led by Seagate chairman Steve Luczo, who was elected to Xiotech’s board of directors.
Xiotech, a 12-year-old Seagate spin-off, acquired Seagate’s Colorado-based Advanced Storage Architecture (ASA) group earlier this month. Neither Xiotech nor Seagate has said much about what ASA is up to. Xiotech said it acquired “certain assets” of the ASA business, along with a license to incorporate the technology into its existing storage solutions. Xiotech will use the new funding to bring the technology to market.
Mike Hoch, Xiotech’s vice president of marketing, said the ASA technologies “are highly complementary to our existing storage business. We’re convinced we have game-changing technology, and for that reason we need to be careful on how we talk about it. We will certainly keep you informed as we announce more details on the product publicly.”
CEO Casey Powell said the company is “really well positioned to help the storage industry rethink assumptions at a truly fundamental level.”
Minnesota-based Xiotech is one of the largest private storage companies, with annual sales of about $100 million, and has been profitable for two years, although the company doesn’t appear to have grown much in the last couple of years. The ASA acquisition “gives us the technology advantage we’ll need to now focus on generating significant revenue growth,” Hoch said.
Asked why the company hasn’t joined the mass of storage companies going public, Hoch replied, “We’re focused on the business fundamentals. We’re acquiring great technology and expertise which will broaden and advance our storage solutions and grow our business. We are a private, profitable company and see this acquisition as a tremendous business opportunity.
“With that said, we do not have any immediate plans to go public, though we wouldn’t rule it out at some point in the future.”