Amid a wave of consolidation in the enterprise flash sector, corporate buyers seem keen to buy relatively young companies (in revenue terms) at a hefty multiple.

Venture capitalists have poured over $1.7B into flash storage companies since 2007. Notable venture-backed exits in the enterprise flash sector including last year’s IPOs of hybrid storage platform Nimble Storage and Violin Memory has no doubt helped.  Interestingly, while Violin’s stock price has fallen off since its IPO, Nimble is trading at historic highs.

Looking at private company valuations for flash storage companies since 2011, we see that the average and median price-to-sales (P/S) ratio in the enterprise flash sector has stood at 12.5x and 13.2x, respectively.  It’s clear that corporate buyers appear keen to acquire flash memory offerings at a healthy multiple.

The chart below highlights the distribution of exit valuation multiples in the enterprise flash space since 2011. (Note: The underlying transaction level data is available on CB Insights using valuation multiples search.)

flashstoragemultiplesThe specific company and exit valuation multiples that make up the above chart can be found on the ‘Research’ tab here, after logging to CB Insights. This research is only available to paid subscribers with access to CB Insider Research.

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  • originaldiscokid

    Violin is off because of well-publicized irregularities that were uncovered after the IPO. They’ve deposed the entire executive team, and the situation over there is highly unstable. Nimble was built for an exit, and they’re going to continue to grow as the leading startup to outmaneuver the big boys (EMC, NetApp, Hitachi, HP) in certain accounts and segments. They have also invested heavily in a massive sales team to grow topline revenue. They’re not profitable yet by a long shot and are likely positioned for acquisition mid-term.