Storage Informer
Storage Informer

Virtual Iron Was Bleeding Money When Oracle Bought It

by on May.22, 2009, under Storage

NY Times: Virtual Iron Was Bleeding Money When Oracle Bought It

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We recently reported Oracle had acquired Virtual Iron, but now The NY Times has obtained financial documents that show Virtual Iron lost a heck of a lot of money in 2008:

“The documents indicate that Virtual Iron had just $3.4 million in revenue last year. That’s a big rise over $1.5 million in 2007. But Virtual Iron sure spent a lot of money to get that revenue.

Its sales, marketing, research, development and administrative costs were $17.7 million last year, up from $13.6 million in 2007. So, in 2008, Virtual Iron posted a loss of $15.3 million.

Last January, Virtual Iron raised $20 million, hiking its total funding up to $65 million. Highland Capital Partners, Matrix Partners, Goldman Sachs, Intel Capital and SAP Ventures all funded the company.

Oracle has declined to reveal how much it paid for Virtual Iron, but with the revenue in 2008 sitting so low, it seems pretty clear that the investors lost out on this start-up — that is, unless Oracle was willing to pay many, many times Virtual Iron’s revenue. (The company did report $17 million in cash and equivalents in 2008.)”

Ouch. Hard to get excited over this particular case of M&A, even in these troubled times.

URL: http://feedproxy.google.com/~r/Virtualizationdotcom/~3/I7uuuyRKnmU/

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