Wasabi Raises $68M As It Takes On Cloud Rivals Amazon, Google
Joseph F. Kovar
Cloud storage vendor Wasabi Technologies on Wednesday said it closed a new round of funding it expects will give it the fuel it needs to compete against its much-larger peers like Amazon Web Services and Google.
With its new $68 million Series B funding round, Wasabi hopes to invest in sales and marketing and in expanding geographically, said David Friend, co-founder and CEO of the Boston-based company.
"Any time people decide on cloud storage, they look at Amazon and Google," Friend told CRN. "But we want them to also think Wasabi. So we're investing in sales and marketing. And we also want to build out our teams in Europe."
Wasabi's newest funding, rather than coming from traditional venture capital firms, instead was raised from family and friends, the company said.
Friend acknowledged that Wasabi is still a couple years away from being cash-flow positive.
"Our growth rate makes that impossible for now," he said. "Our doors opened up just over a year ago. But we already have 3,500 customers, with another 3,000 customers in trials, and we're seeing revenue growing 30 to 40 percent month to month."
Wasabi in May of 2017 came out of stealth mode with a promise to store customers' data in its cloud six times faster than can be done with Amazon S3 while charging only one-fifth of S3's price.
However, the Wasabi cloud storage service is an open service that is 100-percent compatible with the Amazon S3 API, which means customers can move data into and out of the Wasabi storage cloud with no vendor lock-in.
Wasabi charges a flat fee of $4.99 per Tbyte per month to store data, with no additional fees for accessing the storage or using APIs. The company stores data on its own cloud. That cloud was originally based in its Ashburn, Va.-based data center, but Wasabi in July opened a second data center in Hillsboro, Ore. The company is also planning to open a third data center in Europe by year-end, he said.
In addition to its own data centers, Wasabi -- which has 45 employees -- also develops its own software, Friend said.
"We're so much cheaper than Amazon because we are real storage experts," he said. "We've been doing this for 15 years going back to our Carbonite days. We can go to a disk and grab the bits in a way storage service offerings built on Linux can't."
Unlike Carbonite and similar cloud storage offerings, Wasabi does not offer backup storage or primary storage per se, Friend said.
"We don't know what people are doing on Wasabi," he said. "Customers keep multiple copies of data on Wasabi, on-premises, and on other clouds. We don't know if the data on Wasabi is primary or backup. But now that we have two data centers, we are seeing some customers start to keep two copies of their data on our cloud. For such customers, we may have the only copies of their data."
Wasabi's West Coast data center has a unique feature in its Hollywood, Calif.-based direct connect to the Hillsboro, Ore.-based data center, Friend said.
"We have a direct connect in Hollywood for our media and entertainment clients," he said. "These clients don't want to keep their data in Southern California because of the potential for earthquakes."
Friend is no stranger to disruptive cloud storage technologies. Before founding Wasabi, Friend was a co-founder and the chief executive officer of Boston-based Carbonite, where he worked for 10 years until he left in January of 2015 to found Wasabi.
With the new round of funding, Wasabi has received a total of over $76 million in funding, Friend said. He said he is not sure when another round will be needed.
"Not for a while, hopefully," he said. "We'll need debt funding to build out our data centers. We don't want to use equity for that. We have the banking relationships for capex purchases."