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Tegile takes a drink from flash funding fountain

Tegile Systems pulled in $35 million in funding this week to help beef up sales and marketing for its Zebi storage arrays. Fittingly for a hybrid storage startup, the round included strategic t investments from a flash provider SanDisk and hard drive vendor Western Digital.

Tegile already uses hard drives and solid-state drives (SSDs) from Western Digital’s HGST subsidiary, and those SSDs include SanDisk flash.

Rob Commins, Tegile VP of marketing, describes Zebi as “an all-flash array with a hybrid twist. It looks like all-flash in the SAN but the customer can put spinning disk behind it to reduce dollars per gigabyte cost. Most customers do that, as opposed to going to Violin or Pure for all-flash array and then calling up somebody like NetApp for a bit bucket beside it. Customers can performance optimize with flash and capacity in the same array.”

Customers can buy a Zebi unified storage array with all flash but Commins said most use a blend of flash and spinning disk. He said the startup has more than 300 customers and more revenue than it has in outside funding. Tegile’s total of $47.5 million in three funding rounds is peanutes compared to some other flash startups.

“Until this round, we’ve been running on $12.5 million,” Commins said. “We take a different approach than competitors like Nimble and Pure – they get cash, bring in a bunch of people, build as fast as you can, then round out the edges as you scale. Ours is more of a measured approach. With this round we’ll mostly build up the customer facing side – sales, marketing and customer support. We’ll increase development, but not at the same scale.”

Meritech Capital led the round. Meritech focuses on late-stage startups, with previous investments in Facebook, Fusion-io, Riverbed, Greenplum, Netezza and Salesforce among others who have either gone public or been acquired. Previous Tegile investor August Capital also joined the new round.

Commins said Tegile has been doubling revenue every quarter, and “can see profitability in our sights.” But he said Meritech’s involvement doesn’t mean the company will try to for an initial public offering (IPO).

“We’ll go where the market leads us,” he said.

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