“We started VAST with the mission to build the best storage system the world has ever seen. To unlock value from data in ways that were previously impossible. To build a company we would all be proud to call our own, and a place that will stretch our abilities and force us to become our best selves.”
Renen Hallak, VAST CEO and Founder
Today, VAST Data announced that it has secured $100M of Series C funding at a valuation of $1.2 billion. Following a historic first-year revenue performance in 2019, we’ve had the fortune of receiving interest from new investors such at Next47, Commonfund Capital and Mellanox Capital who have joined our existing investor team (83North, Dell Technologies Capital, Goldman Sachs, Greenfield Partners & Norwest Venture Partners) to usher in the global data infrastructure paradigm shift to Universal Storage.
While the product is Universal Storage, what we’ve been selling is outcomes. The move to VAST has resulted in a radical simplification and acceleration at the application level once customers liberate themselves from the last 20 years of storage complexity. Every day, we are enabling customers to accelerate access to all data and accomplish what has never before been possible, thereby transforming how they do business and the speed at which organizations think and react. Our investors have witnessed this, and they’re excited to be part of this future with us. The story begins with storage, but you’ll have to wait and see what we have in store for our next acts.
VAST is now the newest startup unicorn, and is the first most valuable file storage company since Isilon. I’m a big fan of perspective, and with some perspective we’ve discovered the company’s first year performance has resulted in an unprecedented “time to $B valuation” as compared to many of the leading storage startups that have built businesses that we admire.
April of 2020 will be known as the time when VAST’s new approach to enabling data-hungry applications hit a turning point, creating a critical mass of adoption as the world began its paradigm shift to this new concept.
While this valuation is a reflection of our disruptive force in the market and our early business performance, our path to building the next great storage success story is much different than other unicorn infrastructure companies that have come before us. VAST has engineered a business that uniquely combines rapid sales growth with capital efficiency – we are thoughtfully building a long-term sustainable business that doesn’t adhere to the classic “spend, spend, spend” business models that other venture-backed infrastructure companies exhibit.
We don’t often discuss the mechanics of our go-to-market strategy, but on this occasion it can help to provide some color on how we are charting a path to build the next great independent data infrastructure company that customers can trust to enable their long-term success.
A $140M War Chest
First, let’s start with the why: Why did we raise an additional $100M?
Despite our growth, VAST has always operated as a financially conservative startup. We’ve been fortunate to build a global team of star players that, every day, punch well above their weight and deliver results that other companies accomplish with 2x-3x the number of people. This amazing team has enabled us to outperform the market without even requiring us to dip into the $40M of our Series B financing from February of 2019.
Early this year we received strong interest from venture investors and identified an opportunity to capitalize our business to ensure that we can continue our unprecedented rate of growth. Combined with this new round, VAST now has a $140M war chest that we will spend like camels, not like unicorns.
While the metaphor may not be as flashy, these startup camels prioritize sustainability, and thus survival, from the get-go by balancing strong growth and cash flow.
Alex Lazarow – Forget Unicorns, Startups Should Be Camels
This expanded war chest lays out a clear path to break even, allowing us to thoughtfully invest in our business and maintain forward momentum, to innovate and capture market share across boom times as well as times of market turbulence.
A Different Type of Business
Why are investors so excited?
From the early days, we made the decision to skate to where the puck is going. Legacy enterprise workloads were shifting to the cloud, and small to mid-size IT organizations were getting out of the IT game almost entirely because they could not achieve the level of critical mass needed to fund the overhead associated with maintaining on-premises data center infrastructure and applications.
The strategy for us was and still is clear:
- Focus on customers that operate at a large enough level of scale, where infrastructure is not overhead but is rather a strategic competence. Petabytes are indicative of this scale.
- Optimize a solution for the class of challenges that have been ill-suited by HDD-based and shared-nothing storage architectures. Here, file and object storage applications were most ripe for modernization. While legacy enterprise workloads were fine with legacy storage choices, new machine learning workloads and analytics tools were suffering greatly under the compromises of mechanical media.
The result of this focus is clear:
- VAST’s focus on at-scale customers has resulted in a $1M+ average selling price (ASP), which allows us to minimize our sales and marketing spend on acquiring customers while also maintaining a focus on the customers who will continue to seek innovation at the infrastructure level. Our unit economics are unprecedented, we will not have to raise a billion dollars to sell a billion dollars. This path to break even is clear already today, as our go-to-market effort pays for itself even in these early days.
- We are the only company working to radically redefine the economics of flash infrastructure and bring an end to the storage tiering era, which puts us in a unique position for customers who are trying to modernize the bulk of their capacity and collapse the layers of data storage complexity that hinder their operational and application agenda. Unlike the previous all-flash wars and backup wars, there is no challenger to VAST in the Universal Storage era.
- Customers love the idea of marrying all-flash performance and archive economics. More than that, the promise of our architecture is now a reality that is proving itself in more and more mission-critical production environments every week. The results speak for themselves: In our first full year of operation, our sales exceeded many of the most successful storage startups in history combined.
Powered by a Different Type of Product
Universal Storage is an altogether new category of storage infrastructure that blurs the distinction between many different legacy classes of storage that you’d find in yesterday’s datacenter. Never before was there one system that customers could think of deploying for so many diverse workloads all at the same time. The consolidation opportunity is massive.
Our Disaggregated, Shared-Everything (DASE) approach to building storage is a powerful new way to combine scale, resilience, economy, performance and multi-tenancy in a single scale-out storage platform. When customers no longer have to make tradeoffs around performance or capacity or protocols, it becomes easy to just provision fast, affordable and simple data services to applications.
Most importantly, all of the innovations we’ve created to bring the economics of flash storage in line with HDD storage haven’t fundamentally compromised the performance customers should expect of their flash infrastructure. The aggregate speed that comes from being able to afford 5x-20x more flash for your investment dollar ensures that applications always get the performance they need and, most importantly, users never have to worry about their data being on a slow tier of HDD media — insights become easy to derive from vast reserves of data when all of your data is finally on flash.
Conceived By Contrarian Thinking
“That can’t be done”
“Storage doesn’t work that way”
“Too good to be true”
When we started this company, we were repeatedly told that it was impossible to achieve many of our goals:
- Few believed that we could build an architecture that could employ low-endurance flash for transactional applications and provide 10 years of longevity
- No one believed that we could further reduce file data and compressed data to make flash competitive with HDD storage
- No one thought it would be possible to bring data protection overheard down to only 3%
- We were told it was impossible to consolidate all applications onto one storage platform
- No one believed that standard NAS can be used effectively for exascale infrastructure and high-throughput AI computing
Our objectives compel us to innovate in areas where legacy technologies have simply become complacent with compromise. As Renen said: where we find challenges, our team rises up to become our best selves. We look past the marginal gain and see the vast potential that can come only from a quantum leap, and we commit ourselves to the hard work that realizes this potential.
Above all, we are innovators. Our core values are unchanged since our inception, and this two year old “values video” is as relevant now as it was before we told the world what we were doing. It will be equally relevant 10 years from now… we’ll probably add it to a blog in 2030 to remind you 🙂
So, thank you to everyone who has supported us along our mission:
— to our steadfast investors.
— to our valued partners.
— to our pioneering customers.
— to our amazing global team.
Thank you for bringing us to this turning point, and buckle up for what’s next 🙂
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