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Local tech titan Fusion-io completed its $250 million initial public offering in June 2011, and the company saw $252.7 million in revenue for the first three quarters of 2012. But when Fusion-io was founded in 2006, it was snubbed by local venture capital firms, said CEO David Flynn.
Flynn spoke at a Holladay Chamber of Commerce meeting on Tuesday, detailing the company’s history and revolutionary technology.
Before creating Fusion-io, company founders had embarked on a previous venture—which collapsed when the lead investor pulled out due to its own financial difficulties. Because of that failure, local VC firms turned up their noses at Fusion-io, said Flynn.
Fortunately, Silicon Valley VC firms are more accustomed to the bumpy ups and downs of the start-up world, said Flynn, and Fusion-io found itself courted by the Sequoia Fund and Dell Computers. It eventually raised its first round of funding in 2008 from a group of investors that included New Enterprise Associates (NEA) and Michael Dell.
According to Flynn, Fusion-io’s IPO represented NEA’s second-highest return on investment ever. And prior to the IPO, NEA bought out the company’s angel investors at five times their original investment.
Fusion-io is continuing to take the memory storage industry by storm. The company has grown from its original six employees to nearly 600, and it has formed OEM partnerships with powerhouses like HP, IBM and Dell.
“If you use Facebook, then you’ve used our products,” Flynn told the Holladay Chamber members. “We are at the heart of what powers Facebook and their ability to have over 1 billion users.” Apple is another notable client, with Fusion-io enabling iCloud and the Siri voice-recognition interface.
Fusion-io developed a NAND flash memory platform that significantly increases data center efficiency. Traditional data centers, based around disc drives to store information, are costly and inefficient, said Flynn. They use a great deal of energy, both in powering the servers and keeping them cool.
“Computing today is literally left back in the Stone Age because it’s based on mechanical systems,” he said.
The impact of NAND flash memory will be similar to the way microprocessors transformed computing from the old mainframe systems to PCs, he added. “We’re tapping into a very big pain point in the market.”