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Tallinn-based Leil Storage has secured €1.5M in seed funding to help companies store massive amounts of data more efficiently while slashing energy costs, writes Arctic Startups. The round was led by Karma Ventures with participation from Specialist VC. Founded in 2022 by engineers Aleksandr Ragel and David Gerstein, Leil has developed software that solves a long-standing problem in enterprise data storage.
The problem: data is drowning us
The world now generates over 330 million terabytes of new data every single day—a volume expected to triple by 2030. To put that in perspective, we now create in six days what took all of 2010 to produce.
Storing all this data using traditional hard drives is becoming prohibitively expensive and energy-intensive, especially for organisations like broadcasters, archives, AI training centres, and research institutes that manage petabyte-scale installations (one petabyte equals 1,000 terabytes).
Leil’s innovation centres on making SMR (Shingled Magnetic Recording) hard drives practical for everyday enterprise use. SMR drives overlap data tracks like roof shingles, which allows them to pack about 20% more data per disk than conventional drives. This makes them roughly 20% cheaper per terabyte and significantly more energy-efficient.
The catch? SMR drives require data to be written sequentially to avoid corruption, which requires specialised software. For over a decade, only tech giants like Google, AWS, and Meta used SMR drives because they built proprietary tools for their own needs but never sold them commercially.
What makes Leil special
Leil’s software automates the complexity of managing SMR drives at scale. It handles how data is written, moved, and recovered across thousands of drives while maintaining the higher storage density and lower power consumption.
The real breakthrough: the software intelligently categorises data by how often it’s accessed, groups inactive files together, and powers down those drives until needed. Depending on the use case, this enables up to 70% energy savings without compromising data availability. Dropbox, for example, runs 90% of its storage on SMR drives and has reported significant cost and energy savings.
Leil operates on a capacity-based subscription model and supports gradual infrastructure transitions: companies can deploy the software alongside existing hardware and integrate SMR drives over time.
The new funding will accelerate product development and commercial team expansion as Leil targets the $22 billion enterprise storage market, which is growing at nearly 20% annually.
“The next wave of innovation in AI and science is buckling under the weight and cost of its own data,” said co-founder and CEO Aleksandr Ragel. “We’re making hyperscale storage economics a reality for every enterprise, delivering significant cost savings, reducing environmental impact, and ensuring critical data remains under our customers’ control.”
