If you've been following the startup world over the past year or two, you've noticed a new phenomenon: Tons and tons of privately held companies valued at $1 billion or more.
Massachusetts is home to just one of those companies on the tech side—Actifio. Until today, that is: SimpliVity, a Westborough, Mass.-based specialist in data center management technology, just disclosed that it has raised $175 million in new funding at a valuation of more than $1 billion.
The exact valuation wasn't disclosed. SimpliVity CEO/founder Doron Kempel told BostInno that the company is currently seeing an annual revenue run rate of $100 million, and expects to hold an IPO "when it's the right time."
The company's products aim to drastically simplify the management of virtualized data centers, by delivering what's known as a “hyperconvergence” of information technology products.
SimpliVity's main product is an appliance for use in data centers, called OmniCube, which combines a dozen different IT products into one. That makes for easier-to-use—and cheaper—IT infrastructure, according to the company.
Commercial sales of the product began in April 2013, meaning that SimpliVity has gotten from product launch to a $1 billion valuation in 23 months, Kempel said. That's compared to other IT infrastructure companies such as Actifio, which did so in 44 months, and SimpliVity competitor Nutanix, which achieved the same in 32 months, he said.
Here are three more takeaways from my interview with Kempel:
• A customer of SimpliVity's led the new funding round. The investor is Waypoint Capital, a Swiss firm that is chaired by billionaire Ernesto Bertarelli and invests on behalf of the Bertarelli family. The firm has been focused on making investments in life sciences and asset management—until now, Waypoint CIO Fred Wohlwend told BostInno. Waypoint was so impressed from how the OmniCube performed across the firm's five global sites that Waypoint pursued leading the new round for SimpliVity, Wohlwend said.
The company will likely double its headcount by the end of the year.
• Major hiring is planned. SimpliVity employs 440 right now, with 60 percent of the staff in Massachusetts, which serves as the engineering headquarters. The company will likely double its headcount by the end of the year, Kempel said, with the staff doubling both in Massachusetts and outside of the state. About 40 percent of the new hires will be in sales and another 40 percent in engineering, he said.
• The biggest challenge looking ahead is "execution," Kempel said. SimpliVity has a huge potential market, growing demand and technology that appears to meet the IT infrastructure needs of large and mid-sized companies, he said. "The challenge is execution, because when you have such a perfect storm, I have no excuses" if SimpliVity doesn't succeed," Kempel said. "When everything is going our way, we have no excuses—we just need to execute."
SimpliVity has now raised $276 million since its founding in 2009 by Kempel, a former EMC executive. Ongoing investors that took part in the new round include Accel Partners, DFJ Growth, CRV, Kleiner Perkins Caufield & Byers Growth and Meritech Capital Partners.
SimpliVity was among our 15 Boston Tech Companies to Watch in 2015.
