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Cloud file storage vendor Panzura acquired by venture firm

Chicago venture capital firm buys Panzura, plans heavy investments to boost cloud file storage specialist's market expansion into multi-cloud and data analytics services.

Profile Management Capital has acquired cloud file services specialist Panzura to try to capitalize on the growing cloud storage and enterprise data management market.

The acquisition, disclosed last Friday, brings management changes. Profile appointed entrepreneur Jill Stelfox to replace Panzura CEO Patrick Harr and promoted Jason Luehrs to CFO for the departed Steve Morgan. Profile Management also promoted Panzura's chief product officer Rich Weber to president.

Founded in 2008, Panzura initially concentrated on the cloud gateway space, helping enterprises move from legacy file-based NAS systems to object storage in public and private clouds. Its Freedom NAS filers could cache active data in flash drives for fast access and shift cold data to potentially cheaper cloud object storage. Panzura more recently has shifted its focus to multi-cloud file services, data management and analytics services.

Chicago-based Profile Management, a venture capital firm founded in 2009, focuses on strategic investments in the IT and manufacturing sectors and indicated it would provide significant financial resources and extensive business networks to Panzura for market and international expansion.

New Panzura CEO Stelfox was co-CEO of Edgy, a mid-market catalyst firm that was heavily involved with Panzura's marketing and sales efforts for the past year. She has known and worked with Profile Capital Management president Benjamin Chereskin for years, according to a company spokesperson.

Jill Stelfox, CEO, PanzuraJill Stelfox

Stelfox’s background also includes growing venture capital-backed companies, such as Riverbed and Defywire, and serving as general manager and vice president of a large division of Zebra Technologies.

Sale was in the cards

"Ben has invested in the company for the long term," Stelfox wrote in an email to SearchStorage. "Up until now, Panzura has been backed by institutional investors, which means there's always been a limit to how long investors could hold an ownership stake in Panzura. So, a sale has always been on the cards. Ben Chereskin has an unlimited investment horizon and no plans to sell, and because Profile is well capitalized, there's no need to raise outside capital again to scale the business."

Stelfox said former CEO Harr wanted to leave Panzura to pursue his next cloud venture. "In fact, his decision is what catalyzed the acquisition," Stelfox said.

Ultimately, Panzura's got deeper pockets behind them now, so that should be good for their customers.
Marc StaimerPresident, Dragon Slayer Consulting

Harr issued a prepared statement saying that he was proud of what the company and team had achieved in multi-cloud file and analytics services, including a record 2020 first quarter. Subscription revenue for Panzura's cloud file system and data management software grew 237% in 2019, and enterprise customers more than doubled their global cloud data capacity, according to the company.

In a recent interview, Harr told TechTarget that current customers and new prospects were expanding and accelerating deployments of Panzura's Freedom software to help employees collaborate in the wake of new work-from-home policies. He said Panzura recorded its largest deal in history this year with a large engineering firm.

"Ultimately, Panzura's got deeper pockets behind them now, so that should be good for their customers," said Marc Staimer, president of Dragon Slayer Consulting.

Analysts: Panzura acquisition no surprise

 Amita Potnis, a research director ats IDC's enterprise infrastructure practice, said she knew Panzura was looking for investments, so she was not surprised by the Panzura acquisition.

"My sense over the years was that Panzura just hadn't created a name for themselves," Potnis said. "They've been around for a long time, and for some reason, their business just hasn't taken off. Panzura was making progress with their vision toward [artificial intelligence] but somehow just never was able to undo the perception of being a very traditional cloud gateway/data movement vendor."

Potnis said she expects to see more acquisitions of similar types of companies in the next couple of years. Panzura's main competitors are Nasuni and Ctera.

Scott Sinclair, a senior analyst at Enterprise Strategy Group, also said he wasn't surprised by the acquisition, either. "Given the current state of business and all the discussion around what the 'new normal' will be, it's not surprising that organizations are looking to invest in or acquire cloud-based services firms," he said. "A business, like Panzura, that can significantly improve collaboration should have increased value."


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