Flashy Startup Pure Storage Files for IPO

Pure Storage, a Silicon Valley based startup that sells flash-based enterprise storage arrays, announced that it has filed its S-1 with the SEC, firing the starter's pistol on its run to an IPO. It intends to list with stock ticker symbol PSTG.

Pure has previously raised a $470 million from a variety of investors including Greylock Partners, Redpoint Ventures, and Samsung Ventures. According to the company, its April 2014 raising of $225 million valued the company at over $3 billion. In my estimation, this implies that any IPO will value the company at somewhere between $5 billion and $10 billion for investors to receive a decent return on investment.

Pure's numbers show total revenues of $174 million for fiscal year 2015, total operating expenses of $277 million, and a net loss of $183 million. Compared to a year ago, fiscal 2014 is listed as total revenue of $42 million, total operating expenses of $97 million, and a net loss of $79 million. That's revenue growth of nearly 400% in a year, and an increase in net loss of just over 200%, so things seem to be moving in the right direction.

R&D and sales and marketing expenses are around three times what they were last year, so Pure seem to be investing in new products as well as telling people about them. Good products and good marketing go hand in hand, so these are encouraging signs.

The company announced its latest product line, the FlashArray//m, in June 2015, which looks like a solid product that solves real customer problems in a decent way. When the product was announced I drew a somewhat cheeky comparison to Cisco's venerable 6500 product line, my point being that Cisco made scads of money for a very long time with the 6500 series.

The FlashArray//m still lacks features found in competitor products, like multi-tenancy and QoS, but that provides room for product development, something you definitely want to see in a company about to go public.

I also think that this marks the start of a run to IPO for several other storage startups who have taken lots of investment money. With VMworld just around the corner, I wouldn't be at all surprised to see another one or two IPO run announcements by the end of the year.

The Pure IPO should also give us a solid indication of the market mood: are people hungry for a piece of storage startups? Or are people looking askance at the hefty valuations all this private money is generating? If the Pure IPO is successful, I'm positive we'll see a rush of other companies jumping into the public markets to grab some cash before the public mood changes.

Disclosure: I've been following Pure for a while now, and have received some stickers and a pair of Pure branded cuff-links from the company. I've also had breakfast on their dime a couple of times at briefing events.

Update: An earlier version of this post said that Pure's S-1 was not yet available on the SEC's EDGAR site. This was incorrect, I just didn't look for it properly. You can see it by clicking here.

This article first appeared in Forbes.com here.