Ranovus lands $20M in federal funding to build Ottawa manufacturing facility

Hamid
Hamid Arabzadeh, CEO of Ranovus. File photo.

A Kanata firm that develops technology that makes it cheaper and more energy-efficient for customers to store data in the cloud has landed $20 million in funding from the federal government.

Ranovus says it will use the new injection of capital to build a new testing and manufacturing facility in Ottawa. It also plans to develop next-generation data centre infrastructure it says will double data processing capacity while reducing the environmental impact and cost of storing information in the cloud.

Founded in 2012 by ex-Nortel employee Hamid Arabzadeh, Ranovus now employs more than 40 people at its headquarters in Kanata and offices in California and Germany. The firm counts several of the world’s largest data centre service providers among its customers.

Ranovus says it’s aiming to pour more than $220 million into a long-term R&D program and plans to expand its partnerships with other private-sector companies as well as post-secondary and research institutions and non-profit organizations in its drive to reduce the amount of energy data centres consume.

In an interview with OBJ last year, Arabzadeh said the data centre sector has the same carbon footprint as the airline industry but is growing at a much faster pace. Finding more efficient ways to power its servers is a major priority for the industry’s main players, he said.

“It’s the backbone of everything. You need very power-efficient connectivity,” Arabzadeh said, adding his company’s data-connection hardware uses only a quarter of the power of today’s prevailing technology and runs at 25 per cent of the cost.

The latest funding comes from the federal government’s $1.26-billion Strategic Innovation Fund and marks the fifth major injection of capital for Ranovus. Just last month, the firm announced it had received $8 million from Sustainable Development Technology Canada to fund R&D on a power-efficiency solution for cloud-based infrastructure. Ranovus received $5.5 million from the same fund last year.

The company previously raised $18 million US in the fall of 2014 in a round that included OMERS Ventures, the venture arm of the Export Development Corporation, BDC Venture Capital, Deutsche Telekom and Azure Capital Partners of California. That investment followed an $11-million US round a year earlier.

An engineering graduate of the University of Waterloo, Arabzadeh worked in various roles for Nortel’s optical group during that firm’s heyday before leaving in 2003 for CoreOptics, a California outfit that was bought out by Cisco in 2010 for nearly $100 million.

He eventually launched Ranovus with $1.5 million in seed capital from his own pocket, various angels, former Nortel colleagues and other investors.