Four Data Center Tech Startups Got Big-Money Love in March

Investors bet on power management, secure storage, Kubernetes-friendly data management, and novel switch silicon.

Yevgeniy Sverdlik

March 22, 2019

3 Min Read
Panel, mainframe

Four data center tech startups got big-money love so far this month.

The funding rounds show that investors – VCs and strategic – are betting on smart power management software, uber-secure storage, Kubernetes-friendly data management for hybrid cloud, and the need to rethink switch silicon.

The largest of the four deals was Portworx’s $27 million Series C round, which attracted not only VC capital from Sapphire Ventures and Mubadala Investment Company but also money from old-guard tech giants Cisco, HPE, and NetApp. (HPE is at least one of the three that’s also a Portworx customer.) Those are all new investors who joined the round together with existing backers Mayfield Fund and GE Ventures.

Los Altos, California-based Portworx promises enterprises cloud-native storage and data management that gels with Kubernetes and things that help them trust its solution with their mission-critical data, such as encryption, corporate auth system-integrated access controls, high availability, and continuous multi-site backup.

The second-largest round was $17 million by Virtual Power Systems, the Milpitas, California-based startup that uses a combination of hardware and machine learning-assisted software to move power in the data center to where it’s needed from where it’s not.

While it keeps insisting that it’s virtualizing power – when it obviously isn’t; there are fundamental differences between the concepts of virtual servers and using software to shuffle electrons around – the startup appears to be gaining traction in the market. At least in terms of partnerships. It’s recently integrated with VMware, Schneider Electric, and Artesyn. Intel, Vertiv, Lenovo, and HPE are also partners. Last time we talked with VPS CEO Steve Houck, he said Uber, SAP, and Equinix had been test-driving the solution in their data centers.

The Series B round was led by CUI Global, VPS’s publicly traded partner that builds the hardware for its power-management solution. Its previous investors include Exfinity Venture Partners, Data Collective DCVC, and Center Electric. “The majority of existing investors” took part in the latest round, according to VPS.

Next on the list is RackTop Systems, a Fulton, Maryland-based startup that raised a $15 million Series A led by Razor’s Edge Ventures and Grotech Ventures. Maryland Venture Fund, Blu Venture Investors, and Gula Tech Adventures participated.

RackTop sells what it describes as a super secure Network Attached Storage platform. Access controls, encryption, and compliance are all baked in, the company says, claiming also that customers are already using the gear to store 50 petabytes-plus of data.

The Series A takes things to a whole new level for the startup, whose founders told VentureBeat that they had only raised $1.5 million before this latest round.

Finally, Aeponyx, a Montreal-based outfit that sells network-switch chips built by combining silicon photonics with Micro-Electro-Mechanical Systems, or MEMS, a process technology for making the tiniest devices out of mechanical and electrical components (think electricity and moving parts at sub-millimeter scale).

Aeponyx raised $7.9 million Canadian (about $5.9 million American) in a Series A led by an advanced materials-specialist VC Pangaea Ventures. Together with previous investments and in-kind contributions by the California incubator Silicon Catalyst, the company says it has now raised about CA$18 million total.

Its CEO Philippe Babin is eyeing nothing less than a “multibillion-dollar opportunity” in upending the switching technology for data centers, telco access networks, and 5G, according to a statement. The startup promises that its proprietary technology will both increase network capacity and reduce energy consumption.

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