Editor's Note: The article has been updated to clarify that a Twitter handle named @DoronKempel is fake and does not beloeng to SimpliVity CEO and founder Doron Kempel.
SimpliVity, a Westborough-based data center management startup, was given the coveted-but-perhaps-not-as-coveted-anymore title of a unicorn a couple years ago when it raised a $175 million funding round at a valuation of more than $1 billion. But now the company's value has been slashed because it is getting acquired by Hewlett Packard Enterprise.
HPE announced on Tuesday evening that it will acquire SimplVity for $650 million in cash, a fraction of the company's previously reported valuation.
Founded in 2009, SimpliVity had raised $276 million over four funding rounds. Investors included Kleiner Perkins Caufield & Byers, Accel Partners, CRV and Waypoint Capital.
As we have reported in the past, SimpliVity's main product is a data center appliance called the OmniCube that combines a dozen different IT products — including compute, storage and networking —into one, which the company has said makes for easier-to-use and cheaper IT infrastructure. The company also sold the software component of its solution to Dell, Lenovo and Cisco for their servers, according to TechCrunch.
Kempel previously told us that SimpliVity had reached its $1 billion valuation within 23 months of launching its product, which competed with West Coast competitor Nutanix. The company had previously eyed an initial public offering in 2016, with Nutanix beating the company to the punch last fall.
In HPE's announcement, HPE President and CEO Meg Whitman said that SimpliVity will expand the company's "software-defined capability and fits squarely within our strategy to make Hybrid IT simple for customers."
"More and more customers are looking for solutions that bring them secure, highly resilient, on-premises infrastructure at cloud economics. That's exactly where we're focused," she added.
In a statement provided by HPE, Kempel, a former EMC executive who had a high-profile court battle with his former employer over noncompetes 15 years ago, said "HPE is the logical next step for SimpliVIty."
“HPE’s broad sales reach, extensive partner channel, complementary technology and commitment to innovation will accelerate SimpliVity’s journey and significantly strengthen our ability to deliver the best-in-class hybrid IT solutions our customers are looking for," he added.
The transaction is expected to close in the second quarter of HPE's 2017 fiscal year, pending regulatory approval.
A Twitter account named @DoronKempel that lampooned the acquisition news is fake and does not belong to Kempel, an HPE representative told me.
