Primary Data, a four-year-old, Los Gatos, Calif.-based data virtualization startup that offers a metadata-driven abstraction layer, is in the process of shutting down after raising a whopping $100 million in equity and debt and attracting the likes of Apple co-founder Steve Wozniak to its management team.
An anonymous source also told us: “Primary Data collapsed and got shut down over the weekend. All employees got laid off. Management wanted to buy off all investors and convert preferred shares to common. Investors said no. $100m of investor money is all burnt up and gone, with nothing to show.”
David Flynn, who founded Fusion-io, started Primary Data with Fusion-io cofounder Rick White in 2013. Flynn is Primary Data’s CTO, White its CMO, and Lance Smith its CEO. Flynn was formerly the president and COO at Fusion-io.
Both Fusion and Primary recruited Apple cofounder Steve Wozniak as chief scientist, even though the Woz is not well known as an authority on enterprise storage.
Investors of Primary Data included i Accel Partners, Battery Ventures, Lightspeed Ventures Partners and Pelion Venture Partners.
With Primary Data, VCs were re-investing in a team that had brought them financial success with their previous startup: Fusion.io, a flash storage company that enjoyed a highly successful public offering in 2011. Indeed, when Fusion.io co-founders David Flynn and Rick White left in 2013, investors quickly provided the pair with $50 million to spin up their next thing. (It was separately becoming clear that Fusion.io was heavily reliant on two big customers. As those customers dialed back on their flash storage, Fusion.io’s share price began slipping, and it was acquired in 2014 by the chipmaker SanDisk.)
Primary Data bagged US$50m in funding in 2013, and another $13m in 2014 in a two-part B-round. Its A-round funding is unknown. Three years later, there was a $20m C-round in August 2017, making $83m of known funding, plus a $20m line of credit.
If the C-round and that line of credit have been burned in just four months, that’s a very rapid spending rate for a company with about 100 staff.
We aren’t sure as of this writing why Primary Data’s software disappointed. What we do know is the company had brought aboard the founders’ longtime colleague, Lance Smith, as Primary Data’s new CEO in 2014. Smith had joined Fusion.io as its president and COO in July 2008 and spent six years with the company.