A year after laying off more than half its staff, Colorado Springs-based X-I0 Technologies has raised nearly $10 million to pay off debt and expand into the edge-computing market.
Bill Miller, the company's chairman and CEO, said X-IO soon will be "poised to grow in a big way" in the cybersecurity and financial services industries after spending the last year restructuring the company to allow it to start generating cash instead of hemorrhaging money. X-IO laid off between 50 and 70 employees in April after shutting down its manufacturing operation and refocusing the company away from producing storage systems for data centers, which had become a intensely competitive market and triggered growing losses for the company.
"We are in a much better place. We got through the restructuring of the company, which involved a downsizing, that allowed us to go after an emerging market that combines both computing and storage," Miller said. "Edge computing is computing that needs to happen outside of the cloud, but at the edge of the cloud. We had been focused on greater speed and reliability for the enterprise storage market and if you think about edge computing, it happens in a mostly unmanned location where both resilience and reliability are important, which is more of a niche market."
X-IO sold off much of its previous inventory during the past year and sold nearly $10 million in stock to a large local investor Miller declined to name; Miller's PV Ventures; Front Range Investments, a fund controlled by Ed Glassmeyer, managing director of longtime X-IO majority shareholder Oak Investments, and nine other smaller investors. Those funds were used to pay off $6 million-$8 million in debt, leaving X-IO debt-free, for new product development, rebuilding inventory and replenishing working capital to shore up the company's balance sheet, Miller said.
The company's new edge computing product line will be sold under a new name, Axellio HyperFabric Architecture, and is designed to take in, store, process and respond to data, such as searching for erroneous or fraudulent stock market trades or finding data anomalies that could represent an information security threat, Miller said. X-IO now employs about 50 people and generates revenue that he described in the "eight-figure range," or more than $10 million, although he declined to reveal a more specific number for the privately held company.
Miller took over X-IO about two years ago, when the company employed 160 but was losing about $5 million each quarter and seeking additional investment to keep it afloat. The layoff came after the company failed to secure that financing and began restructuring to survive. X-IO was founded as Xiotech near Minneapolis in 1995 and acquired five years later by Seagate Technology LLC. In 2002, amid mounting losses, Seagate sold 80 percent of the company to Oak. Xiotech acquired a local research operation from Seagate in 2007 and moved the company here in 2011. Seagate, Oak and others invested nearly $300 million in the company.
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