Bloomberg News

Fusion-Io Is Said to Hire Banks for Potential $100 Million IPO

February 24, 2011

Fusion- Io CEO David Flynn

David Flynn, chief executive officer of Fusion-IO. Photographer: Francis Specker/Bloomberg

Fusion-io Inc. (FIO:US), a startup that aims to replace hard drives with flash memory, hired Morgan Stanley (MS:US) and Goldman Sachs Group Inc. to handle its initial public offering, according to two people familiar with the matter.

The Salt Lake City-based company plans to raise about $100 million, said the people, who declined to be named because the talks are private. Fusion-io also has hired Wilson Sonsini Goodrich & Rosati as its legal adviser for the IPO, another person with knowledge of the matter said.

Founded in 2006, Fusion-io is benefiting from a shift to flash memory from traditional storage drives. Flash has no moving parts and can access data more quickly than disks, which rely on spinning platters to hold information. The company has raised more than $110 million in venture capital, and it counts Apple Inc. co-founder Steve Wozniak among its top executives.

Fusion-io joins a growing crop of technology companies planning IPOs now that the Nasdaq (CCMP) Composite Index is approaching its highest level in a decade. Kayak Software Corp., LinkedIn Corp. and Pandora Media Inc. have all filed to go public in the past four months.

Shannon McPhee, a Fusion-io spokeswoman, said the company doesn’t comment on rumor or speculation. “We’re focused on building our business and doing what’s in the best long-term interest of our stockholders,” she said.

Pen Pendleton, a spokesman for Morgan Stanley, and Andrea Rachman, a spokeswoman for Goldman Sachs, also declined to comment, as did Wilson Sonsini’s Courtney Dorman.

Venture Funding

Wozniak, Fusion-io’s chief scientist, has discussed plans to go public, according to a story this week in the U.K.’s Register. The company last raised funding in April, when Meritech Capital Partners led a $45 million investment. Accel Partners, Andreessen Horowitz, New Enterprise Associates and Lightspeed Venture Partners also are backing Fusion-io.

The company said last month that it’s shipped more than 15 petabytes of flash memory to corporations in the past year -- enough to hold more than 199 years’ worth of continuously played high-definition video. Fusion-io combines software and memory chips to speed the rate that server computers can access data. Its products are sold through Hewlett-Packard Co. (HPQ:US), International Business Machines Corp. (IBM:US) and Dell Inc.

Technology companies worldwide are turning to IPOs to raise funds. Yandex, a Moscow-based Internet search provider; Renren.com, the largest social-networking site in China; and Austin, Texas-based HomeAway Inc. are all planning IPOs this year, people briefed on the proposals said last week. The offerings may raise a total of $1.8 billion.

The Nasdaq, which gets more than 45 percent of its value from technology companies, has jumped 22 percent in the past year. Last week, the index came within 1 percent of its 2001 high. Still, it remains 46 percent below its record from the dot-com era in 2000.

To contact the reporters on this story: Serena Saitto in New York at ssaitto@bloomberg.net; Ari Levy in San Francisco at alevy5@bloomberg.net

To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net; Jennifer Sondag at jsondag@bloomberg.net.


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Companies Mentioned

  • MS
    (Morgan Stanley)
    • $35.76 USD
    • -0.37
    • -1.03%
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