Fusion-io Files for an IPO. Translation: Please Buy Us

Fusion-io, the company making enterprise class solid state hard drives, has filed to raise up to $150 million through an initial public offering, the most recent in a spate of IPO filings out of the tech industry. However, unlike Pandora or LinkedIn, Fusion-io is a much younger company making hardware that underlies some of the fast web services booming on the web today. The company recently bragged that it has shipped more than 15 petabytes of storage on its drives, which are found in data centers belonging to Facebook, Myspace and others.
Fusion-io is a relatively young company to try to hit the public markets, and unlike many other startups that file, it isn’t profitable yet. In its S-1 filing with the SEC, Fusion-io reports income revenue of $36.2 million for fiscal year 2010, which ended in June, and a loss of $31.7 million. For the six months ending in December 2010, it reported incomerevenue of $58.3 million and net loss of $8.2 million. A large chunk of its recent income revenue has come from Facebook, which is installing Fusion-io’s drives into its data centers. Last year, I reported that Facebook was testing Fusion-io’s drives, and it seems the social network made quite a commitment.

Fusion-io has lost more than $77 million in its history, which isn’t unusual for a hardware startup. In fact, it looks like a more traditional IPO in that it needs lots of cash in order to grow. Which it does. The company, which has raised more than $111 million in venture capital since its launch in 2007, is riding several huge trends in the data center sector from real-time access to data, to storing more data and attempting to analyze it. Its drives also use less energy, since there isn’t a hard drive spinning away inside the server, helping it lower the energy costs associated with data centers. The company says the costs to power and cool the modules “are less than one percent” of the costs to power and cool hard disk drives.

However, given that Fusion-io raised $45 million in April 2010, and the company plays in a red-hot area right now, it’s likely Fusion-io’s IPO is somewhat of a feint to drive up its valuation in case of an eventual acquisition offer. My hunch is that Fusion-io has received some interest and realized it could boost its value significantly if it had the threat of an IPO to fall back on. A healthy IPO market does drive up valuations, which is good news for many of the other companies lurking in the wings and their venture investors.