Acopia Networks is doing so well it’s being given money it hasn’t even asked for.
The file virtualization startup will announce Monday that it has received an additional $20 million in venture funding, bringing its total haul to $85 million.
Acopia CEO Christopher Lynch said the round, which was led by late-stage venture capital firm and new investor Meritech Capital Partners, “came unsolicited” and was “a significant increase in valuation.”
Lynch said the company had 40% sequential sales growth in the first quarter, driven by new customers such as Yahoo, Dreamworks, Novartis and Iron Mountain, and expansion with existing customers. He expects that growth rate to continue for the next few quarters, if not accelerate. Acopia plans to turn profitable this year and go public next year, he said.
“Our first-quarter results are a clear indication that the market for file virtualization products is well established, and that Acopia’s products uniquely address the needs of large-scale deployment,” Lynch said.
Lynch said Acopia’s revenues exceeded that of all other file virtualization vendors combined in the first quarter, and were more than triple EMC’s revenues from Rainfinity. An EMC spokesperson said Rainfinity sales are higher than Acopia claims, but declined to provide specific sales figures. The EMC official said Rainfinity is also sold “as part of an overall service to assess the capacity utilization and performance of a large-scale NAS environment.”
Lynch said Acopia is uniquely positioned for blue chip customers because of its “multi-protocol, heterogeneous” approach.
Tony Asaro, senior analyst at the Enterprise Strategy Group’s ESG Lab, said Acopia “has an excellent product and technology. They have done a good job going after large firms in general and doing with some key accounts in NYC.”
That said, Asaro said Acopia’s edge may come from good old-fashioned execution.
“I don’t think it’s an issue of their technology versus their competitors,” he said. “First, there aren’t that many competitors. There is Attune and they are fairly new. There is NeoPath and they are making good progress as well. And there is EMC with its Rainfinity solution. All of these solutions have their strengths and weaknesses. Right now I think the issue is more around business execution than anything else.”
Meritech was joined in the round by existing investors Charles River Ventures, Accel Partners, Star Ventures, Vesbridge Partners and Goldman Sachs. Acopia said the funds will be used “to aggressively expand U.S. and international sales efforts and scale customer support operations to meet the strong market demand for its products.”