Since 2010, Seagate Technology has invested and partnered with several flash storage startups. But an analysis of the Business Social Graph reveals that Seagate has been lagging behind competitors on the investment and M&A front. If Seagate's activity picks up, here's who will be on their radar.
When Seagate Technology (NASDAQ: STX, Mkt Cap: $14.38B) announced a strategic partnership and $40M equity investment into flash storage startup Virident Systems in January 2013, the company signaled a growing strategic focus on transitioning from traditional hard drives to significantly quicker flash memory technologies.
Ultimately, however, Sequoia Capital-backed Virident was snapped up by competing hard drive maker Western Digital for $685M. And in a market that has seen over $1.7B in venture capital funding since 2007, Western Digital isn’t the only big player aiming to invest and acquire flash storage startups. In fact, analyzing historical partnership, investment and acquisition behavior using the Business Social Graph reveals an increasingly competitive M&A market with Seagate noticeably absent from the list of notable flash storage acquirers.
As shown below, Seagate has limited its activity in the flash storage space thus far primarily to investments and partnerships. Besides Virident, Seagate has invested an partnered with Israeli firm DensBits Technologies and ethernet storage company Coraid, which unveiled a flash storage solution in August.
But as the social graph reveals, Seagate’s activity on the investment and M&A front is less than that of other competitive peers ranging from Cisco to SanDisk. Cisco invested in Whiptail Technologies prior to acquiring the company this month for $415M, while Seagate rival Western Digital has compounded its purchase of Virident with previous acquisitions of sTec and flash cache startup VeloBit as well as investments in flash storage startups Skyera and Tegile Systems.
The most bullish investor-acquirer in the flash space, naturally, appears to be flash memory specialist SanDisk, which has not only acquired several flash-related startups but has also deployed a $75M fund through its SanDisk Ventures arm to invest specifically in startups deploying flash memory technologies. Below is a chart highlighting Seagate’s flash storage investments relative to other publicly-traded firms that have entered the space.
Given Seagate’s previous investments and partnerships, we’ve identified five private flash storage companies which we expect may may eventually find themselves as likely M&A targets of Seagate. A full list of potential Seagate M&A targets can be found on the ‘Research’ tab, after logging in to CB Insights. (Note: The list of companies is only available to CB Insights paid subscribers with access to CB Insider.)If you aren’t already a client, sign up for a free trial to learn more about our platform.