We’ve got 13,000 channel partners today. And we’d like to more than double that. And we’re in 13 regions around the world now, including the U.S., Canada, England, France, Germany, Netherlands, Singapore, Australia, Japan, I’m probably forgetting something. But we want to be at somewhere around 25 or 26 regions by this time next year,’ says Wasabi Technologies CEO and co-founder David Friend.
Funding The Future Of Wasabi
Boston-based cloud storage company Wasabi Technologies this week said it has raised an additional $250 million in funding, half of which came from private equity and other institutional investors and half from debt, and said the company now has a valuation of over $1.1 billion.
The new funding represents a big bet on Wasabi, which is using its large channel and alliance partner base to compete against cloud giants like Amazon Web Services by promising to provide cloud storage for about one-fifth the cost of using public cloud providers. But a bet on Wasabi and its serial entrepreneur CEO and Co-founder David Friend is a safe move given how quickly the company has grown and the success Friend and his co-founder partner Jeff Flowers had with their previous venture, cloud storage provider Carbonite, which was acquired in 2019 by OpenText for $1.42 billion.
Friend measures the success of Wasabi in various ways, including having 13,000 channel partners worldwide with plans to double that number over the next year, and alliance relationships with many of the top data protection vendors who make it easy for their channel partners to use Wasabi for back-end cloud storage.
[Related: 2022 Storage 100: Who’s Got Your Backup?]
With this new round of funding, Friend has found a new way to measure success: being able to raise debt.
“Finally, people are taking us seriously enough that we can raise debt as well as equity,” he told CRN. “This is a really important milestone for us because when you have a lot of physical facilities like we have, you really want to finance that stuff with debt. It’s like real estate. When you’re going to put up an apartment building, you don’t do that with equity. You borrow most of it from a bank. And then you use your equity for sales and marketing and R&D, that kind of thing.”
Friend said he expects this to be the last round of funding Wasabi gets. And he also said the company really didn’t need the extra funding, but instead could immediately become a profitable company if it had been satisfied with its current situation.
“The emphasis right now is on top line growth,” he said. “And as long as we’re expanding into all these new markets and building all these data centers and everything else, that’s a cash drain. But the minute you slow the growth down, you can turn profitable. So we’re at that point now where, if we didn’t have access to more investment capital, we would just slow down the growth and we can survive indefinitely.”
Wasabi and its investors are betting on growth. For more on how it hopes to achieve that growth, read on.
How has Wasabi been doing?
We’ve been busy. We’ve opened up six new regions since Christmas. So it’s been one a month since the beginning of the year, and then raising all this money has kept me pretty busy.
So what’s behind the new $250 million in funding?
Finally, people are taking us seriously enough that we can raise debt as well as equity. This is a really important milestone for us because when you have a lot of physical facilities like we have, you really want to finance that stuff with debt. It’s like real estate. When you’re going to put up an apartment building, you don’t do that with equity. You borrow most of it from a bank. And then you use your equity for sales and marketing and R&D, that kind of thing.
How much of that $250 million is equity versus debt?
Half and half. So $125 million of debt, and $125 million of equity. If you include the $125 million debt, that brings the total invested in Wasabi to over $500 million.
What’s the plan for the money?f
We’ve got 13,000 channel partners today. And we’d like to more than double that. And we’re in 13 regions around the world now, including the U.S., Canada, England, France, Germany, Netherlands, Singapore, Australia, Japan, I’m probably forgetting something. But we want to be at somewhere around 25 or 26 regions by this time next year. And the reason for that is, there are so many data sovereignty laws, meaning if you’re in one country, you can’t ship data out of the country in many cases. And so as we try to capture this migration of data from on-prem to the cloud, we need to be where the data is. And if we get to 25 or so regions by next year, that will give us access to roughly 80 percent of the world’s data. So that’s the important milestone, from my perspective.