Bootstrapping First from Colorado, Then Scaling with VC Funds: Faction CEO Luke Norris (Part 6)

Sramana Mitra: What does this do to your revenue? You’re approaching $20 million in revenue and you’re facing competition. What happens? How does the revenue change?

Luke Norris: At this point, the revenue started to flatten a little. We’re growing but we’re not growing anywhere near what we used to. We’re still finding our way on how to position this complex product.

At this point, in early 2018, we catch wind that one of our partners, VMWare, is going to build a cloud technology on top of Amazon. They’re going to manage this service. We quickly find out that VMWare is going to have a significant issue that we can help with.

This issue is that their software will have software and compute grow linear on top of Amazon. If you want more storage, you have to buy more compute. Our cloud-attached storage can separate the growth of storage from compute.

We’re able to get VMWare interested in this and help us build in the automation and the framework to test this out and show that it works. VMWare’s parent company, Dell, finds out about this. We’re able to negotiate with Dell coming in as a large investor to help bring this technology to the enterprises.

In mid-2018, we closed a round led by Dell Technology Capital and River City. That was an $18 million round, all to bring technology to market and validate it within VMWare.

There’s also a very interesting dynamic in this. Dell is the world’s largest storage company. We’ve been building all of our technology with NetApp. Now we’re able to multi-home our technology with both NetApp and Dell.

That not only opens an additional market, but it also gives us freedom to have two vendors have two routes to the market. Under this new Dell relationship, we launched in the beginning of 2019. We effectively go from zero Fortune 500 to six Fortune 500 in the first three months.

We actually raised another round with Dell and River City in January of this year. We have initial customers and we have now VMWare that we’re able to go-to market with. We have NetApp and Dell storage where we can process the unique technology.

Now we’re getting enterprises with gigantic use cases. We expanded internationally. We’re in the UK now. This year, we’re expanding into Frankfurt and Asia Pacific. We’re off to the races.

Sramana Mitra: What are you forecasting for this year?

Luke Norris: I prefer not to say.

Sramana Mitra: Things are going well.

Luke Norris: Yes. We’ll end the year with well-over a hundred employees with some rapid expansion with our partners.

Sramana Mitra: You’re doing this out of Colorado?

Luke Norris: That is correct.

Sramana Mitra: Congratulations. It sounds like you’ve done a fabulous job navigating the industry. Great to hear all that. Thank you for your time. 

This segment is part 6 in the series : Bootstrapping First from Colorado, Then Scaling with VC Funds: Faction CEO Luke Norris
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