Isilon Seeks IPO

Storage companies continue to line up for initial public offerings, profitability notwithstanding.

Isilon Systems on Sept. 1 became the fourth storage company this year to file for an IPO. Of the four — Isilon, Double-Take, CommVault and Riverbed — only CommVault is clearly profitable.

That said, there’s a difference between filing for an IPO and actually going public. No storage company has gone public since Xyratex two years ago, and even Engenio was forced by market conditions to withdraw its IPO plans. Still, both CommVault and Riverbed have issued prospectuses, so they could break the storage IPO drought and begin trading soon.

Isilon, which hopes to raise $86 million in an IPO, makes clustered storage systems and boasts more than 200 customers. The five-year-old company grew sales by 175% last year, and sales were up 245% to $23.8 million in the first six months of 2006, but the company lost $19.2 million last year and $10 million in the first six months of this year. Comcast and Eastman Kodak make up a third of the company’s revenues.

Isilon has raised $70 million in funding, and had $10.9 million in cash as of July 2.

The company received a letter on July 31 from SeaChange alleging patent infringement, and responded a week later that the claims were irrelevant. Also, CEO Steven Goldman is a defendant in stock option-related lawsuits from his sales and marketing tenure at F5 Networks, but claims the lawsuits are without merit.

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