April 27, 2015 / 8:50 PM / 4 years ago

Exclusive: Data storage company Nutanix to hire banks for IPO - sources

(This version of the April 24th story corrects name of Nutanix investor SAP Ventures to its new name, Sapphire Ventures in final paragraph)

By Liana B. Baker

(Reuters) - Nutanix, a maker of server and storage systems, is in talks to hire underwriters for an initial public offering later this year that could value the U.S. company at more than $2.5 billion, including debt, according to people familiar with the matter.

Banks have carried out interviews for underwriter assignments in the IPO and the roles have yet to be awarded, the three people said this week, asking not to be identified because the deliberations are confidential. Nutanix declined to comment.

Data storage has been a bright spot is what has been a slow start for U.S. technology IPOs so far this year. Reuters reported earlier this month that Pure Storage Inc has hired banks in preparation for an IPO, one year after a private placement valued the data storage company at more than $3 billion.

In November, Nutanix Chief Executive Officer Dheeraj Pandey said in an interview with Reuters he was hoping for a “substantially better valuation” in an IPO than the $2 billion at which Nutanix was valued last year in its latest round of funding.

The San Jose, California-based company counts the U.S. Army, Starbucks Corp (SBUX.O) and eBay Inc (EBAY.O) among the thousand-plus customers for the infrastructure it builds for data centers. Nutanix competes in the hyper-converged storage company where several storage systems are combined.

Using technologies similar to those used by Google Inc (GOOGL.O) and Amazon.com Inc (AMZN.O), its datacenter platforms eliminate the need for external storage and speed up data transfer.

Nutanix raised $140 million in a funding round last summer. Backing came from Fidelity Investments and Wellington Management. Previous investors in Nutanix include Goldman Sachs Group Inc (GS.N), Riverwood, Khosla Ventures, Battery Ventures, Blumberg Capital, Sapphire Ventures and Lightspeed Venture Partners.

Reporting by Liana B. Baker in New York

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