Taps turned off at Liquid Computing

Contact: John Abbott

It looks like Liquid Computing will be the latest hardware startup to shut down due to a lack of funding. The former high-performance computing vendor, founded in 2003, had raised $50m of VC funding over three rounds. Its C round of $8.3m closed as recently as last summer, and was intended to fund a shift in emphasis toward ‘unified computing’ and the development work required to eliminate proprietary hardware so that the Ottawa, Canada-based company’s Liquid Elements software would run instead on industry-standard, Intel-based servers.

However, investors ATA Ventures, Axis Capital, the Business Development Bank of Canada, Export Development Canada, Newbury Ventures and VenGrowth, along with private investor (and chairman of the board) Adam Chowaniec, were apparently unwilling to put in a further funding round, despite all the activity around unified computing stirred up by Cisco Systems and Hewlett-Packard. CEO Vikram Desai and the majority of the 50 employees have left the company. Efforts are being made to sell the intellectual property, though it’s not clear who the likely buyers might be. Cisco, Dell, HP, IBM and Oracle/Sun have already set their own technical directions in this area and are unlikely to be interested.

Previous hardware-oriented startup casualties include Fabric7, Panta Systems and SiCortex – the latter lasted until June 2009 until its VCs similarly lost their nerve. And at the end of last year Verari Systems also ran out of money; its assets were acquired by founder Dave Driggers and the vendor has since reemerged as Verari Technologies. PlateSpin (acquired by Novell in February 2008 for $205m) and RLX Technologies (acquired by HP in October 2005 for an estimated $25m) were both operating in a similar area to Liquid, and all made a similar shift away from their original hardware roots over to software. Egenera and Racemi have also turned themselves into pure software providers and have so far retained their independence.