Tiny drives net big things
Cornice Inc. lands $22M in venture capital funding
By Erika Stutzman, Camera Business Writer
May 29, 2003
A small storage company in Longmont has been quietly developing its tiny, inexpensive drive for three years and is ready to face the public with announcements ranging from a windfall of venture capital to new customers.
Cornice Inc. makes storage for equipment including MP3 players and digital cameras. And at a time when almost no one can secure funding, they've landed $22 million from investors.
Cornice, founded in August 2000, employs 50 people, said Kevin Magenis, company president and chief executive. Magenis said the company's strategy was to lie low until it was ready to sell its product and announce customers.
"There's a lot of companies that have come and gone that were local," he said. On Monday, the firm will announce some customers and partners, Magenis said.
The $22 million round is the company's first venture capital, though it received seed funding from Texas Instruments, which helped with development, Magenis said. Investors include CIBC Capital Partners, Nokia Venture Partners and VantagePoint Venture Partners.
The funds come at a time when venture capital has become very tight.
According to the MoneyTree Survey, Colorado companies raised $152.4 million in first-quarter 2003 compared with $222.8 million in the year-ago period. The survey is prepared by PricewaterhouseCoopers, Venture Economics and the National Venture Capital Association.
According to the survey for 2002, Colorado firms raised $547.3 million, down from the $1.39 billion raised in 2001 and a fraction of the $4.34 billion raised in 2000.
Magenis said he thinks the reason the firm was able to secure funds is simple: "We were more than an idea." The company already had a working prototype by the time it approached investors.
"We had customers we could show (investors) who said, 'If you build it, we will buy it,'" Magenis said.
The company's product is a tiny drive with 1.5 gigabytes of space designed to hold data in portable devices — small MP3 players, personal digital assistants, digital cameras. The power could hold 30 CDs worth of MP3s, and the company says it will be cheaper — both per gigabyte and per storage device — than what's available on the market now.
But Magenis said the firm won't talk pricing until customers are announced next week.
But trade publications, including EE Times and the Webzine Mobilemag.com, have published that the drives will be cheaper than $100 — cheaper than the tiny Hitachi drive. Mobilemag and Ziff Davis Media earlier this month reported an MP3 player with the Cornice device would retail for an estimated $199.
Contact Erika Stutzman at stutzmane@dailycamera.com or (303) 473-1354.
