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Kaminario snares another $15 million in funding

All-flash array startups remain a hot target for investors. Kaminario announced today an additional $15 million in funding, raising the company’s overall total to $143 million since 2008.

Newton, Mass.-based Kaminario, which also has offices in Israel, California and New York, had just disclosed $53 million in Series E funding – its highest round to date – in early December. At the time, CEO Dani Golan said the Series E round was oversubscribed, with demand at about $100 million.

Ritu Jyoti, chief product officer at Kaminario, said the company plans to use the additional $15 million to ramp up sales and marketing and to expand geographically. She said the company waited to close on the extra funds until late December because it wanted to be “selective and thoughtful in our investors.”

“We ultimately decided that this new round of funding would be in the best interest for our goals in 2015,” Jyoti said via an email.

In conjunction with the funding news, Kaminario claimed to achieve more than 100% quarter-over-quarter growth in bookings in Q4 2014. The company said its customer roster includes an elite institution of higher learning, a national food distributor and a top federal agency.

Golan has noted that the company targets midrange enterprise customers with revenue run rates of $100 million to $5 billion. He cited his top competitor as Pure Storage. Pure has attracted $470 million in funding to date, including $225 million last year, according to a report from New York-based 451 Research.

“Kaminario was a little bit late to the party but still has prospects, as the VCs obviously still believe,” said Tim Stammers, a senior analyst at 451 Research. “On paper, its products certainly look strong, but it has taken a while to get to this stage.”

Stammers said Kaminario’s first product came out in 2010 and was DRAM powered. He said the company switched to flash in 2011 and continued to make changes the following year, shifting from PCIe flash to SAS-based SSDs and from blade controllers to 1U modular devices. Kaminario didn’t pick up two important data reduction features, deduplication and compression, until last May, he noted.

“They have a scale-out system and they’re making a lot of basic claims about the product that are quite impressive,” said Stammers. “There’s still time for them to make a claim in the flash market. The reason why there is a question mark is because they didn’t get competitive until 2014 when they added dedupe and compression, by which time other suppliers were already making their mark.”

Stammers said Kaminario appeared to focus mainly on North America while other AFA vendors branched into other markets. But, Kaminario noted today its plans to expand into five new regions in Europe.

Golan recently claimed that sales have quadrupled since the May launch of the company’s K2 V5 product. In addition to inline dedupe and compression, Kaminario announced support for thin provisioning at that time. The company also made a public promise to deliver an average of $2 per usable GB with data reduction taken into account.

Kaminario added data-at-rest encryption in December. Golan said at the time that the company would add replication soon.

“They could still make their mark. They’ve got a good story on the product and they’ve got a good price story,” said Stammers. He said investors are betting on a big return, hoping to see sales fast enough to allow Kaminario to file for an IPO. Another possibility is that Kaminario could become an acquisition target, Stammers said.

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