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Backup and disaster recovery vendors have become a haven for tech investors, indicating how the gap has narrowed between primary and secondary storage. Druva this week became the latest data protection vendor to score a funding haul, bringing in $130 million to help build out its functionality for Amazon Web Services.
The funding puts Druva in position to explore an initial public offering, CEO Jaspreet Singh said, although he did not specify a time frame.
The round led by Viking Global Investors will help build the Druva cloud portfolio. New investors Neuberger Berman and Atreides Management participated in the round, along with existing Druva investors Riverwood Capital, Tenaya Capital and Nexus Venture Partners. The new money boosts Druva's venture funding to $328 million.
Singh said Druva is closing in on a $100 million revenue run rate and has about 4,000 paying customers, including 10% of the Fortune 500. The new money will enable Druva cloud backup services to be available in international markets. Druva until now has primarily focused on North America.
"An IPO is definitely in the cards. We want to hit a little more scale before we get there," Singh said.
The Druva cloud roadmap calls for enhanced security for Kubernetes dev/ops containers and industrial IoT systems, Singh said.
Like other cloud-focused backup vendors, Druva is in the right market at the right time, said Christophe Bertrand, a senior analyst at Enterprise Strategy Group, based in Milford, Mass.
"They're competing in a market that is very favorable in terms of its growth [rate]. We have seen a lot of growth in data recovery as a service. In 2016, 25% of people said they were using the cloud as a backup target. Now, 61% say that. Backup as a service was 39% four years ago and now it's 59%," Bertrand said.
Enterprises also can't rely on the cloud alone, but need to maintain a physical copy for emergencies, Bertrand said. "People have realized that they need to have a copy on premises, even if it's an operation or recovery copy," he said.
Evolution of Druva cloud backup
Druva started out by selling backup software for endpoint devices, but pivoted in 2013 to cloud archive and backup. With the launch of its Druva Phoenix platform, the company rewrote its software stack to build services natively in Amazon Web Services (AWS). In 2018, Druva acquired Ireland-based Cloud Ranger, a company specializing in AWS backup and disaster recovery.
The Druva investment follows a pattern of investors mostly shying away from storage hardware companies. Analyst firm IDC predicts the global data protection market will top $55 billion by 2020. Tech investors have taken note, pouring more than $1 billion in cloud data protection software startups in an effort to challenge stalwarts like Commvault, Dell EMC and Veritas.
Veeam Software leads the way with more than $760 million, including a $500 million investment in January. Veeam's haul came on the heels of secondary storage startup Rubrik's $261 million round. Cohesity, a Rubrik rival, collected $250 million in August, while Actifio closed a $100 million round in June 2018.
Customers don't need a separate AWS account to use Druva. The Druva cloud platform bundles a suite of cloud management services for a single price point, including AWS ingress and egress charges.
"We have natively built our services on the Amazon cloud and made it super-simple to consume," Singh said.
He said customer demand will dictate Druva's support for multiple public clouds. Druva has discontinued support for Microsoft Azure cloud backup due to low demand.