The cloud services sector is still dominated by Amazon and other so-called “hyperscalers” – such as Microsoft Azure, Google Cloud Platform and IBM Cloud. According to IT market research firm Synergy Group, Amazon, Microsoft and Google together accounted for 65% of the global cloud services market as of Q2, up 61% year-over-year.
But that sobering reality hasn’t stopped a few entrepreneurs from trying to shake things up.
The duo at the helm, David Friend and Jeff Flowers, founded Wasabi, a cloud startup that competes with Amazon’s Simple Storage Service (S3). Wasabi launched a few years ago in 2015. But despite that fact, and amid intense competition, Wasabi has grown its customer base to more than 40,000 organizations and raised an eye-poppingly large funding round — most recently a $250 million Series D round that closed this morning.
The Series D — part equity ($125 million), part debt ($125 million) — brought Wasabi’s total revenue to $495 million and valued the company at more than $1.1 billion. L2 Point Management led with participation from Cedar Pine and returning investors Fidelity Management & Research Company and Forestay Capital.
Friend said in an interview with TechCrunch that the new equity will help accelerate Wasabi’s expansion into additional markets and support existing channel partnerships. As for the debt, he added, it will be used to finance equipment and infrastructure to expand the company’s capacity in the Wasabi storage regions through industrial-related offerings.
“In the next 10 years or so, most of the world’s data is going to migrate from on-premises storage to the cloud, and we want it to be done in Wasabi as much as possible,” Friend said. I think closing a big round in this area speaks to Wasabi’s incredible growth, the scale of the cloud storage opportunity, and our leadership as the industry’s largest pure-play cloud storage provider.
Friend and Flowers They joined forces to start Wasabi in 2015, when Friend was still CEO of cloud backup company Carbonate. Flowers, also formerly at Carbonate, was working with several of the founding engineers to create Wasabi and eventually convinced a friend to join the effort.
From the very beginning, Friend and Flowers decided to make Wasabi almost identical to – but in some ways cheaper than – the Amazon S3. The platform supports “fresh” data (recently available data), active archive “cool” data (infrequently accessed data) and passive cool data (frequently accessed data), integrations for gateways, applications and third-party platforms. .
Image Credits: Wasabi
Wasabi’s pay-as-you-go pricing is $5.99 per terabyte per month. The company offers reserved capacity pricing with a 30-day retention policy that allows customers to purchase 50 terabytes or more for a one-, three-, or five-year contract.
Wasabi, which doesn’t charge for withdrawals or API requests, says its storage fees are about one-fifth the price of Amazon S3. But it’s hard to directly compare the two because the pricing structures of Wasabi and Amazon S3 are different. Amazon S3 charges fees to move things in and out of storage, and Wasabi charges customers who store full amounts even if they delete the files.
Over the past year, Wasabi has added storage regions in London, Paris, Frankfurt, Toronto, Osaka, Sydney and Singapore as it seeks to better compete with S3 — bringing the total number to 13 and Amazon S3 to roughly two dozen. Wasabi introduced the Object Lock feature to provide immutable storage to protect against ransomware, human error, and other types of data loss.
“[The new regions] It helps us improve our performance for customers and channel partners who face specific concerns such as data privacy and thus keep their data close at hand. Having multiple data centers around the world means our customers experience very little latency,” said Friend. We have grown our headcount and partner network to support our presence in these regions.
On the customer acquisition front, Wasabi now has customers in over 100 countries, including from higher education, media and entertainment, data protection and disaster recovery, and the public sector. According to my friend, Wasabi poured foreign resources into winning over professional sports organizations this year – an effort that seems to be paying off. The company has recently signed deals with the Boston Red Sox, Boston Bruins and Liverpool Football Club.
Brian Shields of the Boston Red Sox said Wasabi’s service makes sense for the organization’s data work. “As our data needs continue to evolve, from player analytics, the Internet of Things, digital assets and security, this presents a significant learning opportunity for the organization,” he added in a statement. “Wasabi provides a cost-effective cloud-based solution that allows us to quickly release content and improve the level of video analysis and production we do here at the Red Sox.”
Continued Friend: “We’re lucky to be in the data storage business. Cloud storage adoption skyrocketed during the pandemic, fueled by an increase in remote and hybrid work. Cloud storage is no longer nice to have, it’s essential – everyone has data, lots of it every year and it needs to be stored somewhere.
That statement is not necessarily hyperbolic. According to Statista, 60% of corporate data is now stored in the cloud. This is up from 30% in 2015, the year the analytics firm started tracking the trend.
Asked about the economic headwinds and competition from startups like Cohesity, Datrium, Reduxio and Rubrik, the friend said Wasabi’s pricing model is very attractive to its current customer base. This remains to be seen. But with Wasabi’s revenue doubling from 2020 to 2021, the startup is on to something right.
“Often, users can store their data in Wasabi without the maintenance cost of on-premises storage hardware alone…Moving data storage to Wasabi means data storage becomes an operational expense rather than a capital expense – often a huge benefit for enterprise customers,” said the friend. Our growth will continue at a very strong level as technology companies see a significant downturn in business.”
When asked, the friend wouldn’t commit to firm hiring plans, but said he expects Wasabi’s 250-person headcount to “grow.” [the company] It will expand into more vertical markets and geographies.
