Wasabi Technologies, which describes itself as a “hot” cloud storage company, announced today the close of a $30 million extension to its Series B round.
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Switzerland-based Forestay Capital led the financing, which also includes participation from existing investors Ron Skates, former CEO of Data General; Greylock founding partner Howard Cox; and Desh Deshpande.
The extension brings the Boston-based startup’s total raised since its 2017 inception to nearly $110 million. Wasabi had raised $68 million in the first tranche of the Series B in September 2018, also led by Forestay Capital.
There’s a few things that caught my eye about this company. For one, co-founder and CEO David Friend is not shy in saying Wasabi is out to take on giants such as Google, Amazon and Microsoft when it comes to cloud storage.
Secondly, the background of Wasabi’s co-founders is pretty cool. Friend and Jeff Flowers have started five companies together over the years. Their venture prior to Wasabi, Carbonite, sold last year to Canada’s OpenText for an impressive $1.4 billion.
So, I guess you could say they have some chemistry.
In fact, Friend told me in a Zoom interview earlier this week that meeting Flowers in the 1980s was “one of the best things that had ever happened” to him.
“I wouldn’t consider starting a company without Jeff,” he said. “We know a lot about cloud storage and thought we could do it better and cheaper than legacy providers.”
But back to the funding.
Friend declined to disclose the exact post-money valuation, noting only that it was in the “several hundred million dollars” range and “a significant uptick” from its previous raise.
Wasabi says its hot – able to instantaneously store data – cloud storage offerings are superior to Amazon S3 and other first-generation cloud providers in a few ways.
“It’s faster and cheaper,” Friend told me. “And it’s not Amazon, which means a lot to some people. Plus, we’re devoting all our resources to cloud storage whereas these other companies are doing hundreds of other things.”
Specifically, Wasabi claims that its pricing model amounts to about one-fifth the cost of legacy cloud storage offerings, with no fees for egress or API requests.
“Our goal is to become to cloud storage what Iron Mountain is to cardboard boxes,” Friend said. “Cloud storage is becoming a commodity like electricity or bandwidth. There’s no question there’s demand out there. The market is over $40 billion a year already.”
In 2019, Wasabi saw its revenue grow by five times while its customer base tripled to nearly 15,000 organizations.
The amount of new data Wasabi stores has grown by four times from January to April 2019 over the same period last year, according to Friend.
In April 2019, Wasabi launched a channel program, which it says it grew to more than 2,300 partners during the first 12 months.
“And we’re adding about 100 a week,” Friend said.
The company also has about 250 technology partners that have built Wasabi into their product as a storage component behind whatever they do, he added.
Customers range from state governments to enterprises to smaller companies. They include Japan’s NTT, over 200 universities, NYU Medical Center, and Hollywood movie studios.
The company plans to soon be able to sell into the federal government, too.
Wasabi plans to use its new capital primarily to expand its infrastructure and capacity. It also plans to extend its hot cloud storage service to Canada and additional markets in Europe, APAC and Latin America through managed service providers and other channel partners.
“Two-thirds of the world’s storage market is outside of the U.S.,” Friend told Crunchbase News. “We’ve got one chance now to get it all. So we’re going to be expanding as fast as we can and finding the right partners to help us get into whatever market we want to go into.”
Forestay Capital Managing Partner Frederic Wohlwend said his firm doubled down on its investment in Wasabi because it was impressed with its ability to give companies the option of “limitless storage at an unbeatable price.”
“In just three years, Wasabi has harnessed the complex technology that powers its storage and built a strong distribution channel in record time,” he added.
Currently, the company has nearly 90 employees and plans to, naturally, do more hiring.
Blogroll Illustration: Li-Anne Dias