Dell announces $60 million fund for storage start-ups

Tech giant Dell is hoping a new $60 million fund dubbed the Dell Fluid Data Storage Fund will win the hearts of tech start-ups, insisting it will contribute sweat equity in addition to money.

Speaking at the Fortune Brainstorm Tech conference in Aspen, Dell founder and chief executive Michael Dell announced the company will be launching a $60 million fund to invest in start-ups.

Jim Lussier, managing director of Dell’s investment arm Dell Ventures, said in a company blog the early stage investment fund will be known as the Dell Fluid Data Storage Fund.

Dell Ventures openly admits it is interested in investing in areas strategic to Dell’s business, but what they discover could end up applying to the industry overall.

Currently, the fund will invest in the following sectors: storage, servers, networking, cloud computing and virtualisation, big data analytics, mobility, end-user computing, and software.

“We have set our sights on investing in five to ten promising storage start-ups. We plan to obtain equity positions in these innovative companies, with average investments of $3-5 million per round,” Lussier said.

According to Lussier, storage is a huge market with “ever increasing implications”, so Dell is keen to gain further ground in this area.

“We are looking to change the economics of the storage industry by doing two things – bringing high-end enterprise features to the broad mid-market and solving enterprise problems at a mid-range price point,” he said.

“We have put together a cross-functional team of experts from storage, software and corporate development, drawing also on the expertise of our acquisitions.”

“This team will be responsible not only for identifying and evaluating opportunities, but for continued oversight as we follow our investments through their lifecycle, from idea through incubation and finally to market.”

Lussier is quick to point out that Dell intends to contribute sweat equity in addition to funds, this “bringing power of Dell to start-ups”.

“We will be responsible stewards of our financial assets, ensuring that we carefully assess returns against inherent risks of early stage start-ups,” he said.

Dell follows in the footsteps of Microsoft, which is also attempting to woo start-ups with various initiatives, including the recently launched Queensland Microsoft Innovation Centre, which builds on Microsoft’s BizSpark program.

The centre focuses on accelerating the growth of SMEs, start-ups and student entrepreneurs, with a focus on three key areas: skills, business development and connection to industry.

Sharon Schoenborn, Microsoft Australia state director for Queensland and the Northern Territory, said the centre reflects Microsoft’s commitment to promoting innovation and growth.

“The launch of the Queensland Microsoft Innovation Centre will help bridge some of the current gaps for start-ups in their journey to success by equipping and inspiring them to innovate,” Schoenborn said in a statement.

“The centre will act as a hub of innovation for start-ups, partners, developers and students to exchange ideas, build on each other’s strengths and translate those assets into greater… success.”