Cloud-based file service provider Nasuni last week closed on $38 million in funding to boost its expansion plans in research and development and its channel and go-to-market efforts.
The Goldman Sachs Growth Equity-led financing boosted Nasuni’s total to about $120 million since the company incorporated in 2009. The Nasuni cloud storage momentum should help the vendor become cash flow positive by the end of 2018 and profitable by the end of 2019, according to the company’s president Paul, Flanagan.
“We’ve got a great opportunity as enterprises are thinking about moving their unstructured data and taking advantage of not only cloud economics but cloud collaboration,” said Flanagan, who joined Boston-based Nasuni in April.
Flanagan has been a Nasuni board member and investor since 2009 through his work at Sigma Partners and Sigma Prime Ventures, and he helped to build and scale two Boston-area startups, VistaPrint and Storage Networks.
Nasuni cloud storage software ties to Amazon, Azure
Nasuni was an early cloud gateway startup with a virtual appliance designed to cache active data on premises and store less frequently accessed files in the object storage of public clouds such as Amazon Web Services and Microsoft Azure. The Nasuni cloud-native UniFS global file system provides a single namespace to manage the unstructured data. The company also sells physical appliances bundled with its software.
Tom Rose, Nasuni’s chief marketing officer, estimated that customers now keep about 70% of their data in public clouds and 30% on premises in private clouds. He said the increase in private-cloud use reflects Nasuni’s growing partnerships with Dell EMC, with its Elastic Cloud Storage, and IBM, with its Cloud Object Storage (formerly Cleversafe).
The average annual contract for a Nasuni cloud storage software subscription is now $100,000, three times more than it was two years ago, according to Rose. He said customers tend to ask for 20% more capacity when they renew subscriptions, reflecting the increase in unstructured data as well as the use of Nasuni cloud storage for additional workloads.
Flanagan said Nasuni’s revenue has grown between 80% and 90% during each of the last four years. He said the company has about 350 customers ranging from the small- to mid-sized businesses that were the company’s original focus to large enterprises that deploy hundreds of terabytes to more than a petabyte.
“We give enterprises the ability to move all that unstructured data to the cloud and be able to get cost savings by not having to do backup anymore, business continuity. They don’t have to get additional providers for that,” said Flanagan. “And on top of that, we allow these enterprises to collaborate on that data around the world in ways they weren’t able to do previously.”
He said Nasuni’s primary competitors remain NetApp’s and Dell EMC’s Isilon traditional file storage, and the company only infrequently runs up against startups.
Latest Nasuni storage financing round
Flanagan said Nasuni’s Dec. 2016 $25 million financing round gave the company enough cash to operate through June 2018. The executive team didn’t expect to seek additional funds until later this year or the first quarter of 2018. But he said, in the ordinary course of “teeing up” investors for the future, Goldman Sachs’ David Campbell said, “Why wait?” Campbell formerly worked in Goldman Sachs’ IT organization managing storage infrastructure, according to Flanagan.
“Anytime you can get an investor like Goldman Sachs and particularly a guy like David Campbell, who understands what we do, on our board, it was a great move for us,” Flanagan said.
Flanagan said the money would allow Nasuni to explore additional opportunities to grow and expand, whether through aligned partnerships or business development deals with technology or cloud partners. He said the cash would also help to finance “a long funnel of projects” from an engineering standpoint.
Rose said customers can expect to see new capabilities for the Nasuni cloud storage portfolio, including support for more clouds. He said Nasuni moved this year into larger new headquarters in Boston for additional space to expand and grow.