Take that, Rubrik! Veeam gets $500M investment

One day after Rubrik pulled in more than a quarter of a billion dollars in fresh funding, rival Veeam Software picked up nearly twice as much.

Veeam today said Insight Venture Partners has invested an additional $500 million in the data protection software vendor. That brings the total investment in data protection and data management technologies to $761 million this week. Throw in the $250 million funding that Cohesity received in June 2018 and $100 million for Actifio last August, and you have four nine-figure funding rounds worth more than $1 billion in the space in eight months.

Like Rubrik, Veeam is looking to use its haul in part on acquisitions to bring it new technologies. Ratmir Timashev, a Veeam founder and its executive vice president, identified cloud management, containers, and greater support for KVM hypervisors as areas that Veeam will seek to bolster.

“Our goal is to grow beyond backup to intelligent data management,” he said.

In 2018 Veeam acquired N2WS, a small vendor that provides backup for data on Amazon Web Services. Timashev hinted that bigger deals are coming.

Ratmir Timashev

“As we enter our second decade, we might need larger cash reserves for much larger acquisitions,” Timashev said.

Insight Venture Partners invests in other data protection vendors, and owns another Veeam rival, Unitrends. Timashev did not identify companies Veeam is considering buying, but he did say Unitrends is not one of them.

There are significant differences between the two data protection vendors who received funding this week. On the technology side, Veeam remains a software-only product while Rubrik sells software integrated with hardware appliances. Timashev said Veeam, which originally specialized in protection of virtual machines but has expanded into physical and cloud protection, will not follow backup software vendors such as Veritas and Commvault down the path of integrated appliances.

He said Veeam will continue to support a wide range of primary and secondary storage vendors instead of competing against them.

“We understand the hardware model, but Veeam is software-defined,” Timashev said.

On the business side, Rubrik is a traditional technology startup relying heavily on venture funding and aiming to eventually become a public company. Swiss-based Veeam was self-funded for years, until Insight Ventures came aboard as a minority investor in 2013. Timashev said the venture capitalist and private equity firm remains a minority investor, even with the fresh $500 million investment. Veeam has no other venture or private equity funding.

Timashev said Veeam, which launched in 2006, has been profitable for years. He said the vendor fell just short of its goal for $1 billion in bookings in 2018 but he expects to hit that milestone in 2019. He said Veeam’s goal is to go beyond $2 billion within five years. Timashev said Veeam made more than $100 million in profit in 2018, and had close to $800 million in cash before the new investment.

Unlike Rubrik and most startups, Veeam is not looking to get acquired or go public. Timashev and Veeam’s other founder, CEO Andrei Baronov, remain in control of the company.

“We don’t have to go public,” Timashev said. “We have the ability to stay flexible and nimble without additional pressure from public shareholders. We have the flexibility that a public company does not have.”

Timashev said Veeam has more than 3,500 employees and plans to add nearly 1,000 in 2019.