Mountain View's Pure Storage on Thursday will unveil one of the year's biggest startup financings: A $150 million funding round led by T. Rowe Price, Fidelity and Tiger Global Capital.

Pure officials say it's the largest funding deal ever for an enterprise storage company. And George Crump, president of industry research firm Storage Switzerland, didn't disagree.

"I don't think anybody else is even close," said Crump, who was briefed about the funding in advance of Thursday's news. "When they told me they had some funding, I was expecting to hear $25 million, $40 million, something like that."

In the first half of the year, there were fewer than half a dozen venture deals in the United States of $150 million or more, regardless of industry sector, according to data from the National Venture Capital Association.

Crump called the massive deal "a validation of their approach to the market -- focusing on software first."

Unlike some of its competitors, Pure sells commodity storage hardware that CEO Scott Dietzen said differs little from that offered by bigger rivals such as EMC and NetApp. But 4-year-old Pure claims its data compression algorithms make it possible to store data on flash memory at a price comparable to that of hard disk.

Dietzen, former chief technology officer of BEA Systems, called flash "radically smaller and faster than mechanical disk. The big barrier's been that it's too expensive."


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The company does not disclose revenue, but Dietzen said the company has been growing at more than 50 percent each quarter for the past three years. Head count nearly doubled since January, to more than 225, and Dietzen predicts it will approach 400 by the end of the year.

Pure's previous venture capital investors, including Greylock Partners, Index Ventures, Redpoint and Sutter Hill Ventures, are also participating in the new funding round. But Dietzen said bringing in public-market investors like Fidelity and T. Rowe Price will help the company march toward its goal of an initial public offering of stock.

Crump, the analyst, said the deal "sends a message to other vendors. They're going to have to go public to compete."

Indeed, Violin Memory of Mountain View filed plans this week to go public, and San Jose's Nimble Storage reportedly plans a filing in the near future.

A Nimble spokeswoman said the company does not comment on "speculation or rumor regarding potential IPO plans."

Dietzen, for his part, offered praise for Nimble but said it tends to focus on a different class of customer, using what he called "consumer-grade flash."

Higher-end data storage is a $60 billion market, Dietzen said. "The reason why investors are willing to write big checks is they're seeing the entrenched independents in danger."

Contact Peter Delevett at 408-271-3638. Follow him at Twitter.com/mercwiretap.