TechCrunch
30 Days In, Bitcoin Angel Group BitAngels Doubles Network To 120, Puts First $100K Into Seasteading Venture, Blueseed
As has been written ad nauseam, we’ve seen a lot of activity in the wild and whacky world of cryptocurrency of late, thanks primarily to the tech industry’s new obsession with Bitcoin. Depending on whom you ask, digital currency like Bitcoin will either be worth nothing in 10 years, or its value will make Warren Buffet weep. It’s a polarizing topic at is very essence, but one thing is for sure, so far, venture capitalists are loving this emerging market — and startups are beginning to follow suit.
In late May, we introduced you to the Bitcoin market’s latest growth milestone: The launch of BitAngels, the first multi-city angel network and incubator dedicated exclusively to digital currency startups. Appropriately given its focus, BitAngels is a distributed network of angel investors and entrepreneurs that came together over the course of a few days in the wake of the Bitcoin 2013 Conference.
At launch, some 60 angels had joined the network and had pooled together just under $7 million in Bitcoin, which the founders planned to invest in $20K chunks, or increments thereof. While BitAngels isn’t a formal fund per se (so the Bitcoins are soft-circled, not in escrow), all involved are accredited, experienced investors, many of whom have made themselves available as advisors.
Like Bitcoin itself (or not, depending on the day), the angel network and incubator is growing like crazy. One month removed from launch, BitAngels has doubled its number of investors to 120 and has added nearly $10 million in capital to its reserves, bringing its total to just under $18 million.
Behind this steady growth, the network announced that is has officially completed its first investment. Its first, $100K investment went to BlueSeed, the “seasteading venture” that incubates startups in international waters not far off the coast of Silicon Valley. Naturally, its offshore incubator has drawn a handful of Bitcoin companies, as they aren’t subject to any regulation from Uncle Sam during their seafaring incubation.
The angel network and incubator for cryptocurrency startups is the brainchild of Engine.co founder David A. Johnston and SocialRadius CEO/Marketwire founder Michael Terpin, along with four additional founding board members Gyft CEO Vinny Lingham, Memory Dealers CEO and “Bitcoin Jesus” Roger Ver, Tradehill CEO Jered Kenna and angel investor Sam Onat Yilmaz.
BitAngels also tells us that it is in the final stages of due diligence with three other Bitcoin startups and, although it can’t yet reveal their identities, the founders expect to fund one or more of them in the next 30 days.
For more, find BitAngels at home here.
EMC Acquires Israeli Storage Startup ScaleIO For $200M-$300M To Compete Better With The Cloud Kings
Palo Alto-based ScaleIO is one of a new generation of startup storage providers that’s using intelligent software to help big companies streamline and converge their data storage operations at scale across thousands of servers. On a mission to re-imagine the very operations of enterprise data centers, the startup’s tech takes aim at the core business of storage giants like EMC and IBM. In fact, ScaleIO claims that its block storage technology offers 80 to 90 percent savings compared to the bigs.
Well, it appears that at least one of the bigs has been listening and wants the startup’s tech for its own. TechCrunch has learned today that EMC, one of the largest data storage providers in the world, has agreed to buy ScaleIO for $200 million to $300 million. The news was first reported by Avi Schneider at Israeli blog GeekTime, and as the deal is reportedly still in the final stages, according to our sources, neither EMC nor ScaleIO would offer official comment on the news when reached by TechCrunch.
While the terms of the reported deal are still unclear, if this range holds true, it’s a big win for both sides — and, following the likes of Waze, it’s another big exit for Israeli tech startups. In EMC’s case, the storage giant has been taking a turn toward a more AWS-style infrastructure, and the ScaleIO acquisition gives the company access to the startup’s “block storage,” an adaptable, multi-use data-storage technology that makes it easy to scale across thousands of servers.
In other words, ScaleIO’s software uses the hard disk on application servers to create high-performance, shared virtual storage array networks (SAN), which offer the easy scalability and elasticity of “block storage.”
With the cost of hosting coming down and the quality, speed and elasticity of cloud computing on the way up, small and medium-sized businesses have been moving to cloud hosting infrastructures (like, say AWS) at a breakneck pace. In turn, larger companies are increasingly consolidating their own clouds into massive data centers. These clusters continue to increase, resulting in all sorts of cost- and management-related headaches for the companies that manage these data centers.
That’s why EMC has been moving to a more AWS-style system and the reason why ScaleIO’s technology holds appeal for the storage provider. What’s more, with the consumerization of IT, and employees now using a wide range of consumer-friendly applications and tools at the office — not to mention bringing their own personal devices — along with the rise of the Internet of Things, infrastructure providers like EMC are going to have to be able create a bridge between connected devices and consumer and enterprise clouds, among others.
This means not only more big data and more servers, but a sort of industrial web. As data centers consolidate and startups turn to cloud hosting services, the bigs will have to adapt, offering the things clients have come to expect, such as database management, capacity planning and scalability, while maintaining uptime. Doing so in a smooth manner is becoming critical to the millions of applications, tools and businesses housed in these data centers.
For EMC, the ScaleIO acquisition follows its purchase of network storage system provider Isilon for $2.5 billion in 2010, and marks its second acquisition of an Israeli storage startup in the last 12 months. The company scooped up Flash storage pioneer ExtremeIO in May of 2012 for $430 million.
The move also represents a fairly early exit for ScaleIO, which just raised $12 million from Greylock and Norwest Venture Partners in December as part of its first round of financing. However, the startup was built by a veteran team that has designed and developed storage software apps for companies like IBM, NetApp and Xtremio, which, of course, was just acquired by EMC.
The challenge for ScaleIO, as Alex wrote in December, has been in scaling its business — one that’s largely controlled by resellers that have long-standing relationships with the big players. While ScaleIO CEO Boaz Palgi said at the time that he has had “no problem selling direct to customers,” scaling the business and selling direct will no longer be as much of a concern.
As part of its Q1 earnings in April, EMC announced that 50 percent of its storage revenue “now comes through indirect sales,” and at a $52 billion market cap and doing $22 billion in revenue, ScaleIO now has plenty of scale at which to test its mettle.
Overall, the ScaleIO acquisition represents the impact that cloud services are having on EMC. The company has faced its own challenges competing with AWS. Adding a software storage capability gives EMC a better capability to offer a service that can help it compete better with the cloud kings.
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