SandForce gets another $21m funding
Why would a fabless silicon startup need that much cash?
Solid state drive (SSD) controller start-up SandForce has landed $21m of C-round funding, just eight months after a $20m-plus B-round. Why does a fabless silicon startup need that much cash?
SandForce is developing SoC (System on Chip) products that, it says: "boost the storage I/O performance of next generation servers, workstations and personal computers by many orders of magnitude." In a job advert introduction it states it is: "creating innovative and disruptive products for storage, consumer electronics, Netbook, Laptop and Enterprise markets."
The "consumer electronics" phrase is interesting, as it implies competition in the markets served by SanDisk and others.
SandForce's current line of SF-1000 storage processors are being used by SMART to develop enterprise flash drives: hard disk drive replacements, probably using multi-level cell (MLC) flash. Unigen is the other announced customer and it is developing a range of 1.8-inch and 2.5inch SSDs with 3Gbit/s SATA and 6Gbit/s SAS interfaces.
What we appeared to have yesterday was a well-funded startup, one with less than 100 employees, that is basically about ASIC and firmware design and specification. Its main costs are people. Now, all of a sudden, it bulks up its financing with another $21m which will be used - according to CEO and president Alex Navqui - for: "our expansion phase as well as [accelerating] our new products development that will help us maintain our market leadership."
The funding round saw contributions from SandForce's existing investors - DCM and Storm Ventures - together with the mystery couple of tier-1 storage suppliers, one of whom is thought to be Seagate. However, the round was led by newcomer TransLink Capital, who brought in four new investors, including LSI Corporation, that well-known supplier of Engenio disk drive arrays (which use STEC SSDs) and hard disk drive controller logic and silicon.
Twenty one million dollars can hire a heck of a lot of people, yet SandForce has just nine jobs posted on TechIt; there's no major ongoing recruitment drive. So what is the money needed for?
One SandForce job advert for a firmware engineer states: "We are writing firmware for a game-changing device that targets the Enterprise and Laptop markets for solid state storage. Our work product will be reaching customers at the beginning of 2010."
We don't know if customers means OEMs or end-users, but we would suggest it means OEMs. It indicates that this is a new version of its storage processor, as SMART and Unigen will be working with the existing SF-1500 enterprise SSD and SF-1200 client device products.
The job description says the hired person will "contribute to the commercial release of our 1st generation product" in their first 90 days, which takes us to the end of January or into February, and will: "Contribute to the tape-out of the next-gen product."
This implies that there is a new processor product coming in early 2010, with a scheduled version 2 of it later in 2010. We might also expect development of the current SF-1500 and SF-1200 silicon. That gives us three product development activity strands.
These strands imply a wider audience, both numerically and geographically, for SandForce's marketing and sales messages. We can envisage an expansion of its sales efforts to the Asia Pacific region and possibly to Europe.
The El Reg reckoning is that SandForce is going to significantly expand its sales offices outside continental USA. It is likely that it will start a recruitment drive to speed its product development in the face of intensifying SSD competition from Fusion-io, Intel, HitachiGST/Intel, Micron, Pliant, SanDisk (recently chosen as Sony's SSD supplier for its Vaio ultra-thin notebook), Seagate, STEC, Super Talent, Toshiba, Violin Memory, Western Digital, WhipTail and many more suppliers aiming to get rich in a hoped for SSD bonanza. ®