Violin Storage hopes to raise $180m through IPO

Violin Memory, the Toshiba backed flash storage firm, is embarking on an initial public offering that it hopes will raise up to $180 million [£113 million] from the initial 18 million shares.

It is hoped that the IPO, which has been planned since 2011, will be priced at around $8 [£5] to $10 [£6.28] per share with Violin itself is valued at close to $800 million dollars based on the total company.

Toshiba’s holding in the company will fall from 14 per cent to 11 per cent as a result of the IPO and the proceeds from the stock sale will allow the company to repay debt and have more funds available for working capital purposes.

The company saw revenue rise to $73.8 million [£46.3 million] in the fiscal year to 31 January, despite the net loss ballooning to $109.1 million [£68.5 million] from $44.8 million [£28.1 million] a year earlier.

Company growth has stalled since Hewlett-Packard decided against using Violin Memory storage in favour of using its own line of products. Bloomberg report the contract accounted for 65 per cent of Violin’s revenue in the fiscal year 2012 and is now worth just 10 per cent.

Lead underwriters on the IPO are the trio of JP Morgan, Deutsche Bank Securities and Bank of America Merrill Lynch, and the IPO backs up the widely held confidence in the flash storage space – even with the increased use of cloud storage.

LinkedIn identified Violin Memory as one of the most in demand Silicon Valley startups around, with the company attracting high interest from software engineers. It means attracting significant new investment will be simpler as a result of attracting the best talent and saw it placed third on LinkedIn’s top 10 ‘inDemand’ startups of 2013.

Image Credit: Flickr (Independent Data Solutions)