Cohesity backs up truck, unloads $250M in funding
Fast-growing secondary data storage vendor Cohesity closed a massive $250 million funding round today, a total that could give it enough capital to become a public company within a few years.
SoftBank Vision Fund led the Series D round, with participation from Morgan Stanley Expansion Capital and previous investors Cisco Investments, Hewlett Packard Enterprise (HPE) and Sequoia Capital. Cisco and HPE are Cohesity partners, making its DataProtect software available on their servers. Cohesity now has $410 million in total funding since 2013.
Cohesity and Rubrik — both have founders with ties to hyper-converged pioneer Nutanix – have championed the converged secondary storage market with management software running on integrated appliances or across clouds. Rubrik ran its funding total to $292 million with an $180 million round in April, 2017.
Cohesity claims its revenue grew 600% in 2017 from 2016, and it gained more than 200 new enterprise customers in the last two quarters. Cohesity chief operating officer Rob Salmon said the vendor grew its headcount from 200 to 600 over the past nine months or so, and he expects growth rate to continue or accelerate with the new funding.
Salmon said the vendor will expand its sales and marketing while accelerating product development. Japanese-owned SoftBank is expected to push the startup into the Asia market to go with its current presence in North America, Europe and Australia.
Salmon stopped short of saying this will be the final funding round or will lead to an initial public offering of stock. Still, Cohesity seems headed towards an IPO with its impressive revenue growth rate and funding.
“I would expect this check will take us an awful long way,” Salmon said. “We expect that we’ll hit another milestone in the foreseeable future, but we’re not here now to talk about an IPO or if we’ll need more funding. This will help us carry momentum into the market. We have an eye towards continuing to accelerate growth, and also an eye towards profitability and what that brings. We expect to be a big player in this market, and we expect to disrupt legacy solutions in the market. That’s what we’re focused on now.”
Cohesity and Rubrik have had an impact on data protection and data management with what they call converged or hyper-converged secondary storage. Their software uses a scale-out file system running commercial hardware or across multiple clouds to handle all non-primary data. Cohesity uses a broad brush to paint secondary storage, going well beyond backup and even including files that fit in the traditional NAS bucket.
Cohesity’s DataPlatform includes DataProtect software and Hyperconverged Nodes that can be the vendor’s branded appliances or servers from HPE or Cisco.
Since Cohesity and Rubrik came to market, established vendors such as Dell EMC and Commvault have launched appliances with integrated data protection software.
“I would make the argument that over the next three to five years, all secondary architectures will be measured against what Cohesity has done in this area,” Salmon said. “This is the architecture enterprises will measure startups and legacy vendors against.”