Coraid disappears after funding quest fails - sources

Former employee tells CRN Coraid has begun filing for bankruptcy

US-based Ethernet storage vendor Coraid may be finally closing down for good as CRN understands it has begun filing for bankruptcy.

Reports first circulated that Coraid was facing funding troubles in January, causing the beleaguered vendor to "significantly reduce the size of the company". Then in March, Coraid chief executive Dave Kresse sent CRN a statement which said: "Coraid continues to explore all options for maximising value", but now according to a former employee the vendor has begun to file for bankruptcy, appearing to end any hopes of finding a saviour for at least a part of the business.

"They are currently filing for bankruptcy and the paperwork has actually started for that," Franklin Martinez, former global escalations director at Coraid, told CRN.

Martinez has now started up a support branch for Coraid hardware in Athens, Georgia called Two Twenty Consulting with a group of other former employees.

CRN was alerted to Coraid's website going down last week, and the site currently says the webpage is not available. Coraid's Twitter account says the page does not exist, and the US office phone does not ring.

"They are probably going to fully close things down within the next 30 days but to be honest they have been saying 30 days for the last two months so it might take a small bit longer," Martinez said.

He said the US office has been closed since the end of February and all US staff received their final pay packets, but they did not receive anything extra.

"We got our final pay cheque and a box, and that was it."

All Coraid's intellectual property should be going to auction within 30 days, Martinez said.

He said he understood that the remaining stock the vendor had left would be auctioned off.

Coraid has previously raised $114.3m (£75.3m) in venture-capital cash, including $29.3m in series D funding in December 2013, but it appears to have finally run out of money.

A former partner of Coraid, who did not wish to be named, said: "They have already tried all the funding options, which is why they are where they are, so I suppose it's obviously a very sad end and it is without doubt the end of the road."

Coraid was unavailable to comment.