Scality Closes $45 Million Series D Funding to Transform the Storage Industry with Software-Based Storage Solution

english / japanese

Operating Capital Secured to Accelerate Scality’s Go-to-Market Strategy and Develop Indirect Sales Channels to Expand Global Reach and be Primed for a 2017 IPO

San Francisco, CA – August 24, 2015 – Scality, the leader in software-based storage for the information age, today announced it has completed a $45 million Series D funding round. The latest funding round includes new entrant and strategic partner BroadBand Tower, Inc. (BBTower), all existing investors, led by Menlo Ventures, and 65% of the Scality staff, bringing the total investment in Scality to $80 million. Scality will use the funds to continue to increase its salesforce in North America, continue to expand internationally and actively support its resellers.

Since its last round of funding in July 2013, Scality has increased its revenue by 400%, grew its staff from 42 to 160, announced major customers, including most recently Deluxe, RTL II, and Phoenix, and signed major distribution agreements. With the signing of a global resale agreement with HP in October 2014, with Dell last week, as well as other relationships with server manufacturers, more than 50% of the server market is reselling Scality RING software. Over the past two years, Scality has significantly expanded its European and Asia Pacific presence and in 2015, following a record 2014, opened a Japanese subsidiary, Scality KK, to address the company’s growing Japanese customer base, as well as an office in Singapore. In January 2015, IDC named Scality a leader in object-based storage*. This year also marks the company’s expansion to the East Coast with the opening of Scality’s Boston Research and Development Center. To expand Scality’s market traction, and address the increase of customers who want to try Scality’s RING software, Scality released an online trial of the software in June, available to anyone at Scality.com/Trial.

“There’s no doubt in my mind that today, Scality is the biggest disruptor of the traditional storage industry, and I am extremely excited to witness their progression. Their innovative storage model is meeting demand for scale like no other product on the market, and is poised to keep up with the steep incline in data volumes. With Jerome’s forward-thinking mindset, we expect to see Scality continue to be a trailblazer and to take its RING technology to the next level,” said Douglas C. Carlisle, Managing Director at Menlo Ventures.

In March of this year, Scality announced a strategic distribution partnership with BroadBand Tower, as the first Cloud Solutions Partner in Japan. As part of the partnership, Scality will build a Japanese support desk and QA team to provide substantial support as well as build a structured entity with sales, system engineering and marketing departments.

“BroadBand Tower doesn’t only resell technologies. We actively invest in new innovations and market disruptors to give our customers an edge in their businesses. Like server virtualization and clustered NAS before it, software-based storage is a relatively new concept in Japan, and we wanted to be the first to bring it to the Japanese enterprise market,” said Mr. Hiroshi Fujiwara, Chairman, President and CEO of BroadBand Tower, Inc. “We believe that software-based storage is the future, and many Japanese companies across all vertical industries will benefit from it.”

BBTower joins Menlo Ventures, IDInvest, the Digital Ambition Fund, Iris Capital, and Omnes Capital and Galileo Partners, as Scality investors. In addition, the Series D funding round was completed with participation from 65 percent of Scality’s employees.

“Based on our extensive analysis, Scality is a leader in object-based storage – a market that represents $21.6 billion in 2015, and is growing 21.5 percent annually. Scality is unique in how its solution blends the file and object technologies that are required to bridge new and existing customer needs. This new funding round is further validation of Scality’s strength in the market and strong value proposition,” said Ashish Nadkarni, Research Director at IDC.

Earlier this year, Scality announced general availability of version 5.0 of the RING, bringing its scalable, software-defined storage platform to the next level by introducing unified file, object and OpenStack storage capabilities that enable enterprises and service providers to run multiple storage workloads in the same environment, and simplify installation for Scality partners and resellers. In June the company introduced the industry’s first software-based storage trial, with a free, online trial of the Scality RING. With this latest round of funding, Scality will continue to accelerate existing product development efforts and bring more research to market in the areas of multi-geo services, file/object interoperability, and security.

“Over the course of the last year-and-a-half, we’ve seen an unprecedented amount of funding given to software storage startups. At the same time, we’ve seen the traditional storage vendors lose market share, change leadership and shift their business model to mimic the software-defined strategy. This latest funding round comes at a time when Scality and the software-defined storage industry are poised to attract billions of dollars from customers that are rethinking their storage strategies. Within our Series D, we are happy to welcome BroadBand Tower, and can report that all of our existing investors have contributed, as well as 65% of Scality employees,” said Jerome Lecat, CEO at Scality. “Our employees and partners believe in us, and the fact that this last funding round was done at 2x valuation speaks volumes about the overall confidence in the future of Scality. This new capital investment will allow us to massively boost our go-to-market, attract strategic new hires, continue to expand globally, and be primed for a successful IPO by 2017.”

Supporting Quotes:

“When we met Scality in 2010 we were immediately convinced,” said Matthieu Baret, Partner at IDInvest. “IDInvest nurtures disruptors, and Scality is disrupting a large industry. The company has grown tremendously since Series B, signing leading customers, recruiting key talent such as Erwan Menard, and entering new markets such as the media industry. We are bullish on Scality, and will continue investing in every round.”

“It’s been incredibly exciting to see such a great team, and great leaders in Jerome, Erwan, and Giorgio, bring change to such a critical market. We have been watching Scality’s progress in 2011, and decided to invest in their C-round, closed in 2013, The company is delivering on its promised and we are proud to continue supporting such an excellent team,” said Frédéric le Brun, Senior Investment Director at Bpifrance, managing the Digital Ambition Fund, initiated by French State, through its Programme d’Investissements d’Avenir and subscribed by Caisse des Dépôts.

“We have known Jerome Lecat since 1994, and have been working with the Scality leadership team since 2010, bringing our experience and contacts in the telco industry. Our investment in Scality at the C-round coincides with acceleration of market adoption for Scality RING software,” said Guillaume Meulle, Partner at Iris Capital. “We are pleased to contribute again to Scality’s growth plan, and look forward to the next stage of the company.”

Omnes was an investor in Bizanga, Scality’s founder’s previous company, and we have watched Scality come out of stealth,” said Renaud Poulard, Partner at Omnes Capital. “We believed in Scality’s mission since day one, to solve exponential storage demand, and it’s remarkable how they’ve been able to capitalize on this need within a variety of industries and use cases.”

“In recent years, storage has evolved from a superfluous concern, to a necessity,” said François Duliège, Partner at Galileo Partners. “In the beginning, Scality started solving storage problems for email and service providers and have now evolved to support the near unlimited storage requirements of media companies and enterprises.”

“The amount of information we generate as human beings is forcing us to take another look at how to store this data for long periods of time. HP is responding to this need by bringing to life object storage software running on world-class servers, an approach that aligns very well with Scality’s vision. Resiliency and flexibility is what our customers demand, and HP’ purpose-built compute platforms combined with Scality’s object storage focus allow us to answer the customer call,” said Chuck Smith, Vice President, Strategic Growth and Business Development, HP Server Business Unit.

“Dell continues to be at the forefront of adopting new innovations to solve storage challenges. We also were one of the first vendors to conceptualize hyperscale, and have been a leading provider of world-class data center technologies for the past two decades,” said Alan Atkinson, vice president and general manager, Dell Storage. “We are committed to software-defined storage and have worked diligently to build a portfolio of solutions that combine the industry’s leading storage software with Dell’s enterprise technology, services and support. Our new relationship with Scality is a direct result from customer demand for Dell solutions with this market leader for Object Storage. We already have several deployments of the RING on Dell hardware at a variety of enterprises in a wide range of verticals, and plan on many more through our new relationship.”

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About Scality:

Scality is the leader in software-based storage for the Information Age. The RING provides 100% reliable storage with unmatched performance, and is perfect for capacity-driven workloads such as Cloud services, video, and enterprise archiving. It runs on any standard x86 servers powered by Linux, such as the ones of HP, Dell, Cisco, SuperMicro, or Seagate. It creates an unlimited storage pool for file, object and OpenStack applications. Thanks to its underlying object storage architecture it scales to exabytes of data and trillions of files. Seven of the top 20 telecommunications companies, many cloud services, and enterprises rely on the RING for mission critical applications, serving over 500 million users worldwide. Scality is headquartered in San Francisco, with offices throughout the world.

Follow us on Twitter @scality, visit us at www.scality.com to learn more, or try the RING at Scality.com/Trial.

Press Contact:
Lumina Communications PR for Scality
(408) 680-0564
scality@luminapr.com

*Source: IDC MarketScape: Worldwide Object-Based Storage 2014 Vendor Assessment, IDC #253055e, December 2014