OpenDrives, a maker of high-performance data storage drives and software, will consider acquisitions after continued organic growth in 2020 and the establishment of new verticals within the military and federal government, said new CEO Dave Buss.
The company plans to announce a Series B raise in the next few weeks to help with this expansion, and Buss confirmed it is working with an advisor, but he declined to disclose additional details.
The executive said the company has “eyes” for a few potential targets after. For firms to be attractive, they need to either offer a new customer base or advanced technology, intellectual property or patents.
OpenDrives makes physical drives with software that allows users to access large data files without having to go through lengthy processes related to file compression and decompression, Buss said.
“We really consider ourselves a software company,” the exec said. “Our mechanism for delivery of our software platform happens to be through storage drives.”
He said the company would probably generate close to USD 10m in sales this year and should be cash flow positive next year.
OpenDrives’ headquarters are in Culver City, California, and its customers largely come from the media and entertainment industries, which continue to build libraries of digital film and television files, Buss said. Its blue chip customers include Disney [NYSE:DIS] and AT&T’s [NYSE:T], Warner Brothers, Turner Media, HBO and DirecTV.
Buss, formerly president of Cubic Global Defense, Inc., one of three subsidiary business units within Cubic [NYSE:CUB], started his current role at OpenDrives earlier this month after working as a strategic advisor for the company.
Before Cubic, Buss spent 36 years in the Navy, where he started as a pilot. He retired a three-star Navy Admiral, he said, adding that position gave him “intimate knowledge” of the F-35 Joint Strike Fighter program, which according to a U.S. Government Accountability Office report has annual acquisition funding needs that average annually about USD 12.5bn through 2037.
Buss foresees OpenDrives as a potential backend data storage for files being generated by the aircraft, and he has begun introducing the company to manufacturer Lockheed Martin [NYSE:LMT] and government officials, he said.
Lockheed Martin recently finalized a USD 34bn deal for 478 of the aircraft.
The intelligence community, special operations forces and the Department of Homeland Security could use OpenDrives in missions involving satellite imagery, drone video, and comparing real time images against past ones, Buss said.
Buss said competitors are industry titans Dell EMC, Quantum [NYSE:QTM] and in the government space Amazon Web Services, the cloud computing division of Amazon [NASDAQ:AMZN] and Microsoft’s [NASDAQ:MSFT] similar service. What differentiates OpenDrives, Buss said, ties to its better performance and the amount of data volume it could “push through at an enterprise-like fashion.”
OpenDrives shareholders originally included three original co-founders and a number of media executives. That was then further augmented, Buss said, by several venture capital and private equity firms mostly involved in the media and entertainment space. He declined to specify further. Co-founder Jeff Brue died in March from a rare form of cancer.
James Ward, in Charlottesville, Virginia, reporting for Acuris Mergermarket (initially published 11.31.19)