Dell Leads $51 Million Investment in Flash Storage Startup

Dell’s (NASDAQ: DELL) interest in the solid state storage market became evident as the vendor joined a group of investors pouring $51.6 million in a Series B investment into Skyera, a startup in the rapidly growing all-flash array technology segment. Dell Ventures took the lead position among other unnamed investors providing the second round of capitalization, according to Skyera, although the amount of its investment was not disclosed.

With enterprises steadily adopting cloud computing and Big Data and moving toward mobility and social networking, solid state storage–which provides greater speed and performance than traditional disk-based storage–is poised to take on a pivotal role in the industry. Researcher Gartner projects the solid-state drive market to grow from some $390 million in 2012 to more than $4 billion in 2016.

Skyera said it will use the funding to advance production and research and development, and to drive broader adoption of its enterprise solid-state storage solutions, including the general availability of its skyHawk system.

“We view the investment in Skyera as a validation of the disruptiveness of the technology we are bringing to enterprise organizations seeking to take advantage of both the technical and cost benefits of the latest generation of flash,” said Dr. Radoslav Danilak, Skyera founder and chief executive. “Moreover, Dell and the investment syndicate bring deep knowledge of the storage sector that will be beneficial to Skyera as we take our next steps.”

Although Dell didn’t confirm the source of its investment, it appears the money may have come from the $60 million Fluid Data Storage Fund the vendor set up last year. Dell has said it will confine investments from the fund to $3 million to $5 million per round to establish equity positions, so an educated guess is that’s what it did with Skyera.

Jim Lussier, Dell Ventures managing director, pointed to solid-state technology as “a game changer and one of several fertile areas for investment. The investment in Skyera is one example of how we are deploying our Fluid Data Storage Fund to target areas critical to the evolution of storage, and how our venture investing activity supports Dell’s innovation strategy and helps strengthen our enterprise solutions capabilities.”