Contact: Brenon Daly, Simon Robinson
Tucked into NetApp’s fiscal second-quarter release Wednesday afternoon was the company’s first acquisition in about a year and a half. The storage giant reached for NAS acceleration startup CacheIQ, bringing more technology for its flash fight with rival EMC. The deal is being positioned as an IP play, and although NetApp doesn’t plan on developing CacheIQ’s existing product line, the technology looks set to add crucial performance capabilities to its emerging scale-out clustered storage strategy.
The fact that CacheIQ’s technology is key to NetApp is reflected in the price that we understand the company paid for the Austin, Texas-based startup. The valuation didn’t quite make it to the gravity-defying level that EMC paid for pre-revenue, all-flash array startup XtremIO back in May, but CacheIQ did more than OK on its exit. (Subscribers to The 451 M&A KnowledgeBase can click here to see our official estimate on terms of the transaction.)
A restart that emerged from stealth only about a year ago, CacheIQ had drawn in just $10m in funding from angels. The company actually traces its roots back to another startup, StorSpeed, which first emerged in 2009 with a very similar value proposition around NAS acceleration, but then buckled as investors lost interest. CacheIQ acquired StorSpeed’s IP and a small number of its developers in July 2010. According to our understanding, Cache IQ had just started selling its products, with revenue still at only about $1m. We’ll have a full report on the deal in our next Daily 451.
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