IPO FILING: BlueArc Corporation

BlueArc Corporation has filed to come public in an IPO of up to $103.5 million in securities sales.  It has no ticker applied and has not determined if it will list on NYSE or NASDAQ, although NASDAQ is seemingly a more appropriate launch vehicle for a company of this sort.  The lead underwriters are Credit Suisse and Lehman as joint book-runners, and co-managers are listed as RBC Capital, Thomas Weisel, and Pacific Crest.

The company is a provider of high performance unified network storage systems to enterprise markets and data intensive markets such as electronic discovery, entertainment, federal government, higher education, Internet services, oil and gas and life sciences.  Its products support both network attached storage, or NAS, and storage area network, or SAN, services on a converged network storage platform.  It sells via direct sales force and under an OEM agreement with Hitachi and through Cray Inc. (NASDAQ:CRAY). It also has a network of over 40 value added resellers.

Here is the industry numbers the company threw out there: According to IDC, networked storage systems revenue, consisting of NAS, Fibre Channel SAN and Internet Small Computer Systems Interface, or iSCSI SAN, is expected to grow from $12.5 billion in 2006 to over $21.6 billion by 2011, representing a 11.6% compound annual growth rate.  As far as how it fits into the picture, it is still a small fry.  Its annual revenues have grown from approximately $11.5 million in 2004 to $42.1 million in 2007 (Jan. 31 fiscal end) and headcount has grown from 145 in 2004 to 212 as of July 31, 2007; net losses were $27.4 million (2005), $21.1 million (2006) and $12.8 million (2007).

The company was founded in 1998 and began commercial shipments in 2001 and uses Sanmina-SCI (NASDAQ:SANM) as its manufacturer.  BlueArc is heavily venture capital-backed: 31.2% owned by Meritech Capital Partners, 20.33% owned by Crosslink Capital, and 13.03% owned by Morgenthaler Ventures.

Jon C. Ogg
September 8, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.