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Is Pure Storage the fastest-growing company in the history of its industry?

In the race of the unicorns, Pure Storage would have a shot at the Kentucky Derby.

Pure Storage, which recently updated its financials ahead of a hotly anticipated IPO, has claimed to have the fastest growth in "storage industry history" .

To investigate this claim, we looked at other storage companies to have gone public since the dot-com bubble, as well as networking companies and other providers of software-based appliances to enterprises' data centers. For each company, we measured the number of years it took to reach $200 million in revenue as a benchmark for growth. Pure already has over $200 million in trailing revenue and is on track to post revenue well above $300 million in 2015, its third full year of product shipments since launching in 2012. Only one company in our peer group, Riverbed, was also able to hit this milestone in three years, but its year-three revenue of $236 million is less impressive than Pure's mark. All of the other companies we examined took longer to reach this threshold.

Of course, this growth comes at a high cost. Pure's GAAP losses were over $200 million in the last twelve months, and losses will likely remain high as it invests substantially in sales and marketing and R&D. While IPO investors have historically been willing to excuse heavy losses from very high-growth companies, they will need to be convinced that the company's investments are paying off and that it has a clear path to profitability.

Of the companies below, Arista Networks ( ANET ) is held in Renaissance Capital's IPO ETF . Pure Storage may be eligible for inclusion in the ETF after it goes public, depending on the company's market value.

Company Year Product Launched First Calendar Year with$200mm+ in Revenue # of Years to Reach$200mm+ in Revenue Revenue inthat Year ($mm)
Pure Storage 2012 2015 3 >$300
Riverbed 2004 2007 3 $236
Fusion-io 2007 2011 4 $297
Data Domain 2004 2008 4 $274
Nimble Storage 2010 2014 4 $228
Arista Networks 2008 2013 5 $361
Palo Alto 2007 2012 5 $324
VMware 1999 2004 5 $219
FireEye 2008 2014 6 $426
Aruba 2003 2009 6 $219
Fortinet 2002 2008 6 $212
Compellent 2004 2010 or 2011 6 or 7 >$200
Netezza 2003 2010 7 >$220
Isilon 2003 2010 or 2011 7 or 8 >$200
3Par 2002 2010 8 >$200
Violin Memory 2010 N/A 5+ N/A
Source: Renaissance Capital. Some figures are estimated or approximated. The article Is Pure Storage the fastest-growing company in the history of its industry? originally appeared on IPO investment manager Renaissance Capital's web site renaissancecapital.com.

Investment Disclosure: The information and opinions expressed herein were prepared by Renaissance Capital's research analysts and do not constitute an offer to buy or sell any security. Renaissance Capital, the Renaissance IPO ETF (symbol: IPO) or the Global IPO Fund (symbol: IPOSX) , may have investments in securities of companies mentioned.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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