CrashPlan Cloud Storage Vendor Code 42 Grabs $52.5 Million In VC Funding7:28 PM EST Wed. Jan. 18, 2012
Code 42 Software, which developed and launched the CrashPlan series of consumer, SMB, and enterprise cloud storage and disaster recovery offerings, now has an extra $52.5 million in the bank thanks to its first round of venture capital funding.
Code 42, which was founded in 2001 and has been profitable ever since, plans to use the new funding to expand its business globally, said Matthew Dornquast, co-founder and CEO of the Minneapolis-based company.
Dornquast called the $52.5 million funding round unusual for several reasons, not the least of which is the fact that the cloud storage company is profitable and growing.
"You don't see too many companies raise this much capital in their first round," he said. "We've been profitable since our founding in 2001. We were a bootstrap company. And so this is technically a Series A round of funding. But traditional venture capital terms are hard to apply here. The funding is not to establish a new company, but an investment for us to grow faster."
Code 42 currently manages over 100 petabytes of data globally, and currently backs up about 250 million new and unique files per day, which does not include revisions to files previously backed up to its cloud, Dornquast said.
The company has separate CrashPlan offerings for consumer, SMB, and enterprise customers. Most business is done direct with customers, with a minority of revenue coming from service provider partners.
The company's most basic plan starts at $6 per month for unlimited cloud storage capacity for all of a family's PCs, including the PCs of children attending college away from home. Dornquast contrasted that to a service like that of Carbonite, which charges $5 per month per computer for unlimited capacity.
Code 42 also provides cloud seeding, which includes sending a hard drive to a customers location to do the initial backup of files instead of doing that initial backup over the Internet. Customers can restore lost data over the Internet or via an encrypted hard drive sent to their location, he said.
The company owns the networking and storage infrastructure that goes into its cloud offering, and actually designs its own storage gear based on its proprietary compression and deduplication technology, Dornquast said.
"We're a zero-debt company, so our clouds are all paid for," he said. "The funding is not just about the money. We chose the timing and the partners. We believe, at our current scale, our investors can guide us. We think of them as a personal trainer. If we want to get fit, they're the perfect partners."
Code 42 has enjoyed strong, steady growth over the past three years, Dornquast said. "But it's not fast enough, not given the opportunity size and our market space," he said. "We can grow our global presence."
The company was named after the number 42, which was the answer to "life, the universe, and everything" in Douglas Adams' Hitchhiker's Guide to the Galaxy series of radio programs, books, and movies. Dornquast said Adams died the same year Code 42 was founded, and the company name was an homage to the author.