Cohesity Raises Monster $250M Round
Cohesity, the hyperconverged storage system startup that's focused on the vast market for secondary storage and file systems, today announced that it has raised a $250 million Series D venture round led by the SoftBank Vision fund.
Other participants in the round include Cisco Investments, Hewlett Packard Enterprise (HPE), and Morgan Stanley Expansion Capital, along with early investor Sequoia Capital and others. The company has raised a total of $410 million. Cohesity said it will use the funds to power a "global expansion by attacking a problem that enterprises currently spend an estimated $60 billion each year to address using separate point solutions divided between cloud and on-premises environments."
Founded by Mohit Aron, a veteran of Google and Nutanix (NTNX), Cohesity's focus has been on taking the hyperconverged model of building scale-out infrastructure to service secondary storage, a huge but neglected market that accounts for billions of dollars in storage infrastructure in markets such as backup and recovery, DevOps, and more. The secondary storage market has many legacy technology platforms and is ruled by large traditional storage vendors such as Dell EMC, IBM (IBM), and Commvault (CVLT).
Hyperconverged systems, such as those built by Nutanix and Simplivity (acquired by HPE), have taken over in the cloud market because the software can be loaded on to modular, server appliances, handling storage and compute functions, and then connected together with smart software. This enables appliances to be quickly added and chained together in the "scale-out" model to handle increased capacity. Cohesity is taking the same approach but addressing a wider variety of data including non-structured and backup data that may reside on a wide range of file systems. Its chief competitor in the startup market is Rubrik, which recently raised a $180 million round at a $1.3 billion valuation.
The key elements of Cohesity's platform is that it handles a wide range of file systems, has a distributed architecture for storage, and can integrate with major cloud services such as Amazon Web Services and Microsoft Azure.
“My vision has always been to provide enterprises with cloud-like simplicity for their many fragmented applications and data -- backup, test and development, analytics, and more,” said Cohesity CEO and Founder Mohit Aron, in a corporate release. Aron was interviewed by Futuriom earlier this year.
Cohesity already has tens of millions of dollars in revenue and the company reported last year that it's growing 600% year-over-year. It also beefed up its management team in 2017, adding former NetApp President Rob Salmon and former VMware President and COO Carl Eschenbach. The company says it has booked 200 new enterprise customers in the last two quarters, including Air Bud Entertainment, AutoNation, BC Oil and Gas Commission, Bungie, Harris Teeter, Hyatt, Kelly Services, LendingClub, Piedmont Healthcare, Schneider Electric, SF Giants, the U.S. Department of Energy, the U.S. Air Force, and WestLotto.
With both Cisco and HPE participating in the venture round, it's clear that Cohesity is seen as a strategic asset by the larger players in cloud infrastructure. It will be interesting to see whether the company continues on its fast independent path of growth to target an Initial Public Offering (IPO), or whether one of the larger infrastructure vendors comes calling with a large acquisition offer. The $250 million round most likely puts Cohesity's valuation well over a billion dollars now, conferring it unicorn status.
