Claiming to have developed a powerful plug-and-play storage tool for enterprises, Fusion-io Inc. on Monday announced a $19 million Series A round of investment led by New Enterprise Associates.

The startup, which was founded in 2006, makes a device called the ioDrive that plugs into a server slot and uses NAND flash memory--the same kind used in MP3 players and, increasingly, cell phones--to make a small, super-fast storage device called the ioDrive

With the financing, NEA's Scott Sandell and Forrest Baskett have joined Fusion-io's board. Grabbing NEA as a lead investor was a coup for the company, says co-founder and chief technology officer David Flynn. Explaining to VCs the attractiveness of solid-state drives, or SSDs, in the context of the enterprise storage market was a challenge that highlighted the importance of a top-tier, tech-savvy investor, he says.

Other investors in the Series A round, which the company will use to manufacture the ioDrive, included executives and founders of other storage companies, Flynn says, but he declined to identify them. The company also on Monday announced it had named Donald Basile, a former executive with Silicon Valley tech incubator Raza Foundries, to be its CEO.

Flynn spoke with Tech Confidential about the technology behind the company's first product and the challenges involved with hunting down venture capitalists to back it.

Explain how your technology, which has been described as a storage area network on a card, lives up to your claim that it is one thousand times faster than regular mechanical disk drives.

David Flynn: Instead of hundreds or thousands of disks that take up racks and fiber channels switching, we put 160 NAND flash parts on a single card and get extreme performance.

Our philosophy is that this new media, NAND flash, was commoditized due to its use in USB thumb drives and MP3 players and that its adoption in consumer electronics continues to accelerate. But using it in an enterprise scenario hasn't happened.

Trying to make it look like a disk behind traditional infrastructure is not a good idea because it handicaps the potential benefits, the quickness and the manageability. It's hard enough to manage and monitor disks, much more so a disk that is of one media type pretending to be another.

We haven't seen any competition yet that is taking a similar approach to how this technology is integrated. It is designed it to plug right into the server. We've heard rumblings from other VCs we've crossed paths with on the way to getting funded--some that we turned down that have since backed other ventures with similar plans. It's a risk you take when you tell your story to the VC community. You start your own competition.

But we have fairly large head start. We've been in beta for close to a year. Storage is one of those tech sectors where you have to get it right. People are very sensitive to what is holding their bits.

Was it important to you that your initial round of funding come from a big-name venture investor like NEA?

A firm like NEA stands behind its investments. This industry is going to explode in terms of volume. Having the backing of an NEA helps not only capitalize the company, but alsp deters competition that might not have such funders. It will give people a second thought about going into the market or backing another company.

We definitely saw the difference of working with a tier one VC in being able to recognize value in our approach to market that was not seen by other VCs. We found it very refreshing to speak with folks who had invested time in understanding this market. We didn't see that in lower-tier firms.

Raising capital always takes quite a bit of effort, in this case particularly. Our company is now two years old, so we got started before SSDs were evolved. We were to some degree fighting a battle to teach VCs about where this tech would be om play.

But, as an interesting aside, processor performance continues to double with Moore's law, but storage doesn't. The pain point we are addressing is getting twice as wide, but the cost per bit of storage is being cut in half by Moore's Law. When the benefit doubles and the cost halves, the value proposition quadruples. -- Olaf de Senerpont Domis

See March 31 press release from Fusion-io via BusinessWire
For more see Storage Soup and Byte and Switch