VAST Data Secures $100M For Storage, Triples Valuation To $1.2B

VAST Data, a New York-based data storage company, has raised a $100 million Series C round of funding at a $1.2 billion valuation.

But don’t call it a unicorn.

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Instead VAST prefers to describe itself as a camel–a new term that has emerged to describe startups that “prioritize sustainability by balancing growth with cash flow,” according to this Entrepreneur piece. (More on that later)

When it comes to growth, VAST seems to have seen a lot of it. Its current $1.2 billion valuation is triple what the company was valued at the time of its last raise–a $40 million Series B in February 2019.

Co-founder and CEO Renen Hallak said VAST has not yet tapped into the $40 million it raised last year.

Siemens-backed Next 47 led its latest financing, which also included participation from a mix of existing and new investors. They include 83North, Common Fund Capital, Dell Technologies Capital, Goldman Sachs, Greenfield Partners, Mellanox Capital and Norwest Venture Partners. The company has now raised a total of $180 million since it was founded in 2016, according to Crunchbase data.

What it does

VAST has developed an all-flash storage platform that it says makes flash infrastructure affordable for all classes of data, thus “rendering the hard drive and storage tiering obsolete.” The company formally launched the platform in late December of 2018 and emerged from stealth in February of 2019, according to Jeff Denworth, co-founder and VP of products.

It says its technology can be used across a range of sectors, and can even help organizations tackle the global spread of COVID-19 by powering next-generation life science advancements. Key vertical markets today include life sciences, financial services, government and film animation, Denworth told Crunchbase News.

Dozens of organizations globally have already spent over $1 million (on average) to modernize their infrastructure using its platform, VAST says. Customers include the U.S. National Institutes of Health, Squarepoint, Ginkgo BioWorks and some Fortune 500 companies.

The company also says it’s boosted its headcount by 130 percent since the beginning of 2019. It’s planning to use its new capital, in part, to fill over 100 positions and to drive global expansion.

Lak Ananth, CEO and Managing Partner at Next47, said in a statement that “in a little over a year, VAST has delivered some truly record-breaking results.”

Financials

I was curious as to why the company had raised $100 million if it still had $40 million in the bank.

Denworth told me that since VAST is taking market share from billion-dollar companies, it “needed a public yardstick to show that we are both doing well and we’re well capitalized for the foreseeable future.”

“We did this to offer our customers and prospects the peace of mind that we’re here to support our current and future customers for the long term,” he wrote via email. “…We wanted to be sure that we could scale up to meet the needs of this pent-up market demand.”

In a blog this week, Denworth also outlined the rationale behind VAST describing itself as a camel. He said the company believes its first year performance “has resulted in an unprecedented ‘time to $B valuation’ as compared to many of the leading storage startups that have built businesses.”

Specifically, VAST said it took 17 months, which is six to 19 months fewer than its peers. The company determined this by reviewing the S1 filings “of all of the most significant storage companies in IT history.”

Denworth wrote: “VAST has engineered a business that uniquely combines rapid sales growth with capital efficiency–we are thoughtfully building a long-term sustainable business that doesn’t adhere to the classic ‘spend, spend, spend’ business models that other venture-backed infrastructure companies exhibit.”

“VAST now has a $140M war chest that we will spend like camels, not like unicorns,” Denworth added.

“As we look further down the road, our focus lies beyond just being a storage company, but also a next-generation infrastructure company,” he wrote via email.

Illustration: Li-Anne Dias