Technology giants Intel Corp., Samsung Electronics Co. Ltd. and Western Digital Corp. are investing in an Auburn-based startup.

Samsung Ventures, the venture capital arm of Korean consumer electronics company Samsung Electronics, led the $4.5 million equity financing round for Kazan Networks Corp. Intel Capital, the venture arm of the semiconductor-maker Intel (Nasdaq: INTC), and data-storage products developer Western Digital (Nasdaq: WDC) also invested, according to Kazan.

The Auburn-based company, which launched in December 2014, has developed technology to allow cloud data center servers to quickly access solid-state memory that is not physically in or near the server. That “allows for data center configurations that are game changers,” said Bryan Cowger, Kazan Networks' head of marketing.

A prevalent way for data centers to be configured currently is to have disk drives in servers for rapid data access. Kazan’s technology allows for advances in both solid-state memory and in speed of transferring vast amounts of information with very little latency, Cowger said. That allows separation of memory and servers.

Kazan has been self-funded by its founders until this round. The company was started by CEO Joe Steinmetz, chief technology officer Mike Thompson and Murthy Kompella, vice president of engineering.

Kazan chose to go with strategic investors -- funds controlled by large operating companies -- rather than traditional venture capital investors because it is currently more difficult to raise capital from regular VC firms, Cowger said.

Strategic investors want to get into a technology early, and they tend to make investments that will help them in their business, he said. Traditional venture capital investors in the current market are more risk-averse, preferring to invest in later-stage companies.

“Raising money these days is not trivial, yet we ended up with an over-subscribed round, which I think speaks to the strength of both the team and our product direction,” Steinmetz said in a news release. “This round sets us up nicely to continue to grow the team and execute our roadmap through 2016 and beyond.”

By: DocMemory
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