The market may still be marching in place, but for two Israeli storage startups at least, life this week is good. Both file-caching vendor Actona Technologies Inc. and data recovery software player FilesX Inc. have announced new rounds of funding (see Actona Raises $11M Round Two and FilesX Wins $7.5M Funding).
FilesX, which is planning to start shipping its rapid data recovery software at the end of this quarter, announced today that it has received a second round of funding worth $7.5 million. The round brings the company's total financing to $11.5 million. New investor Benchmark Capital led the round, joined by another newcomer, Index Ventures, and the company's initial investor, Genesis Partners (see FilesX Founder Counts Blessings).
While $7.5 million may not sound like a lot of money, FilesX president and CEO Jacob Herbst says he's hopeful that the money will last for a long time. In fact, he expects it to keep the company going for the next two years, at which time, he says, the Southborough, Mass.-based startup should reach profitability. "I'm an 'old economy' guy," he says. "I'm going to keep that money under my boot." [Ed. note: Clearly, the "old economy" he is referring to is that of the antebellum South.]
Gartner Inc. analyst Ray Paquet says it's hard to know how long funding will tide a startup over but says that the smaller rounds are often the smarter ones. "I'm not impressed by people taking in lots of money," he says. Especially today, when almost every round is a down round, large chunks of change just mean that more of the company will go to the investors, he says. FilesX says its latest round was "slightly down."
In any case, the company's technology seems to hit an underserved area of the market. The startup says its initial product, Xpress Restore, provides an easy way to restore volumes, files, and application data, such as email messages in Microsoft Corp. (Nasdaq: MSFT) Exchange, in a heterogeneous storage environment. While there are other startups, including Revivio Inc. (formerly Mariko Systems) and Vyant Technologies Inc., working on the same type of technology, analysts say FilesX won't run into much competition at first (see Vyant Raises $3M Inside Round and Who's Gobbling More Cash?).
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