Boston’s newest billion-dollar tech company is in a market you may not even know exists: copy data virtualization. The new ‘unicorn’ is Actifio , which has raised $100 million at a valuation of about $1.1 billion led by growth investment specialist Tiger Global Management.
A slew of existing venture investors joined in the round, with North Bridge, Greylock, Advanced Technology Ventures, Andreessen Horowitz, and Technology Crossover Ventures all re-upping alongside Tiger Global, which has made a name for itself in recent years through savvy late-stage investments in tech like Facebook, LinkedIn LNKD -3.77% and Yandex.
Actifio is raising the money in tranche, with $75 million already in the bank and another $25 million to come in the next few days. The company had previous raised $50 million a year ago at a $500 million valuation, so it’s doubled its worth in the past year on the strength of 182% year-over-year bookings growth for 2013.
“All of last year, the simple focus was in scaling our business,” says CEO Ash Ashutosh. “The last three quarters we were figuring out how to scale, and the one factor that was a constraint was speed of time. Now this helps me grow as fast as possible.”
What Actifio does is to virtualize, or make physically independent, the large amounts of data a business would want to keep as a copy for backup purposes, testing, and other potential uses like compliance. The amount of data Actifio is handling is massive–an exabyte of data and 55 petabytes of physical storage capacity–and the subscriptions it’s selling aren’t small. Mid-market customers typically pay about $200,000 a year, versus $1.8 – $2 million for larger companies. Actifio claims it can drive down IT costs for customer’s data copying by 90% overall.
Actifio’s already making some serious money, with revenue for 2013 between $50 and $100 million. Ashutosh’s company is only four-and-a-half years old, but it’s already hit a maturity where it could have easily tested the public market for a potential smaller-sized IPO. Ashutosh says the company had the financials but would rather stay “maniacally focused” on winning customers as a private company before considering going public in mid-2015.
“We need to see one of two headwinds come in. One would be customers saying, ‘I know you’ve raised a lot but I wish you were public.’ Or we could have competition nipping at our heels,” Ashutosh says. Going public would actually be a bit of a distraction, according to the CEO. With such a relatively young company, Ashutosh says it’s more likely that the pressure will come from potentially very large clients who want to work with a public company before it would come from investors looking to cash in.
Meanwhile Actifio is committed to staying in Boston moving forward, and might open another office there. Actifio currently sells in 31 countries, which makes up 44% of its bookings. The company’s service plugs in to platforms from the leading enterprise players like IBM IBM -0.65%, Oracle, SAP and VMWare. Ashutosh says his company fits into the middleware category of the market, between new storage infrastructure companies and SaaS companies like Salesforce.com and Workday.
“This is an exciting and very different time for this market,” Ashutosh says. “How do you compare? And now that’s gone to the absolute middleware–the things that are required to actually run your business better.”