Code42 Secures $85 Million in Series B Funding

Code42 Software, Inc., in endpoint data protection and security for the enterprise, announced that it has secured $85 million in series B funding led by new investors JMI Equity, a growth equity firm focused on investing in software and services companies, and venture capital firm New Enterprise Associates, Inc. (NEA).

Existing investors Accel and Split Rock Partners also participated in the financing, increasing their combined ownership in the company.

This brings the company’s total funding raised to more than $137 million.

“Code42 is thrilled to welcome to our team world-class investors JMI and NEA,” said Joe Payne, president and CEO, Code42. “We protect the most important information for the world’s largest enterprises; and our record growth is being driven by Code42’s unique approach to security and encryption, dominance protecting Macs in the enterprise and unmatched scalability. This funding enables us to grow even faster in endpoint backup and accelerates our efforts to build analytics and actionable intelligence on top of the historical archive of end-user data.”

Code42’s growth stems from three primary market dynamics: the explosion of corporate data living on end-user devices, the proliferation of Macs in the enterprise and the consumerization of IT. Code42 silently and continuously protects every version of every file living and moving beyond the firewall. And, unlike legacy backup built only for Windows, Code42 was designed for Apple OS X, Windows and Linux, making it easy to use and manage across all platforms.

Code42’s strength in consumer backup translates to an elegant user experience and wide adoption in the enterprise. In fact, 76% of all Code42 file restores are done by end users themselves.

Code42 has doubled its enterprise Software-as-a-Service (SaaS) revenue year-over-year, led by enterprise-wide deployments.

Other company growth trends include:

• Customers make up seven of the 10 world’s largest technology companies; 10 of the 20 most valuable brands in the world; and seven of the eight Ivy League colleges and universities.
• 85% CAGR in Annual Recurring Revenue (ARR) in the enterprise segment over the past three years
• The volume of data under management has grown 4,900% since 2012 to 5EB. That’s 100,000 times the size of the US Netflix movie library.
• Has more than 37,000 business customers.

“Code42’s modern approach to endpoint backup answers the call for global enterprises challenged with protecting the growing amount of information living outside of the data center,” said Harry Gruner, founder and managing general partner, JMI Equity. “We are impressed with Code42’s ability to meet stringent data protection and privacy requirements by allowing customers to control encryption keys wherever their data is stored – public cloud, private cloud or in a hybrid model.“

“Code42 customers’ backup archive is a unique asset nobody else in security has: all the data,” said Harry Weller, general partner, NEA. “As a result, the company has an opportunity to build a leadership position in unlocking the forensic and analytical value of that data.“

The investment follows a year of momentum for the company. In July, Code42 announced Payne, a SaaS executive and previously the chairman and CEO of Eloqua, as president and CEO. And, Code42 was named for the third time as one of Forbes‘ Most Promising Companies in America.

Code42’s customer-first mindset – resulting in a 97% customer satisfaction rate and a 98% customer retention rate – has received national recognition, including a Customer Experience Excellence award from Gartner and 1to1 Media.