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Cohesity Raises $250 Million, Highest Round Since 2015 Among Storage Start-Ups

Investors led by SoftBank, then Cisco and HPE
This is a Press Release edited by on 2018.06.12

Cohesity, Inc. raised $250 million in an oversubscribed Series D funding round led by the SoftBank Vision Fund with strong participation from strategic investors Cisco Investments, Hewlett Packard Enterprise, and Morgan Stanley Expansion Capital, along with early investor Sequoia Capital and others.

The investment is a testament to Cohesity's leadership in transforming data center and cloud operations with web-scale simplicity for secondary data.

This round brings total equity raised to $410 million, outpacing all other series D enterprise software investments in the United States over the last 18 months.

This is only the second time SoftBank Investment Advisers has invested in an enterprise software company.

Cohesity is using the investment to power large-scale global expansion by attacking a problem that enterprises currently spend an estimated $60 billion each year to address using separate point solutions.

"Cohesity pioneered hyperconverged secondary storage as a first stepping stone on the path to a much larger transformation of enterprise infrastructure spanning public and private clouds," said Deep Nishar, senior managing partner, SoftBank Investment Advisers. "We believe that Cohesity's web-scale Google-like approach, cloud-native architecture, and incredible simplicity is changing the business of IT in a fundamental way."

"My vision has always been to provide enterprises with cloud-like simplicity for their many fragmented applications and data - backup, test and development, analytics, and more," said Cohesity CEO and founder Mohit Aron. "Cohesity has built significant momentum and market share during the last 12 months and we are just getting started. We succeed because our customers are some of the world's brightest and most fanatical IT organizations and are an extension of our development efforts."

Accelerated Enterprise Adoption Drives Company Momentum
Accelerating enterprise adoption: Over 200 new enterprise customers selected Cohesity in last two quarters, including Air Bud Entertainment, AutoNation, BC Oil and Gas Commission, Bungie, Harris Teeter, Hyatt, Kelly Services, LendingClub, Piedmont Healthcare, Schneider Electric, the San Francisco Giants, TCF Bank, the U.S. Department of Energy, the U.S. Air Force, and WestLotto.
Revenue growth: Annual revenue surged 600% from 2016 to 2017.
Customer satisfaction: Cohesity was recognized as a 2018 Gartner Peer Insights Customer's Choice solution for enterprise data center backup and recovery.
Support: The vendor has earned the NorthFace Scoreboard Award for excellence in customer service the last two years in a row.

By simplifying application and data management while dramatically efficiency, Cohesity has delivered value to customers. Its DataPlatform addresses the fragmented and complex infrastructure that enterprises are currently attacking with massive resources that could be driving success in other parts of the business.

"We believe Cohesity's hyperconverged architecture promises to fundamentally change the secondary storage landscape. We are excited to help fuel the company's momentum in providing enterprise customers with seamless application and data movement across the cloud and corporate data center," said Pete Chung, managing principal and head, Morgan Stanley Expansion Capital. "Cohesity represents that elusive combination of rapid growth, meaningful scale, and market momentum we look for as later-stage investors."

Cohesity will also benefit from the renewed support of strategic investors Cisco and HPE, both serving the Forbes Global 2000. HPE offers a suite of solutions built with Cohesity's platform. Their decision to double down on prior strategic investments in Cohesity will give the company a greater foothold to grow its presence among enterprise customers throughout the world.

"HPE's expanding relationship with Cohesity stems from our commitment to deliver the best technology solutions to solve our customers' crucial business challenges, whether through organic development or partnership," said Vishal Lall, chief strategy officer, HPE. "We continue to collaborate closely to integrate Cohesity's market-leading hyperconverged secondary storage platform with our cutting-edge data center solutions to provide an integrated, tested, and validated offer to customers. We are proud to invest and partner with Cohesity through our Hewlett Packard Pathfinder program."

"Cisco has a long history of innovation in modernizing the data center and we are excited to increase our investment in Cohesity," said Rob Salvagno, VP, corporate development, Cisco. "Cohesity has quickly managed to scale in the secondary data and applications market by delivering a software fabric that combines the simplicity, scalability, and cost efficiency modern enterprises are looking for."

"We first met Mohit when he was envisioning how to bring modern system design to the secondary storage market, which led to the founding of Cohesity," said Dr. Bill Coughran, partner, Sequoia Capital. "We've been thrilled with Cohesity's tremendous growth since its Series A and are excited by its accelerating progress."

"In the same way that Mohit Aron transformed the primary storage environment as founder of Nutanix, Cohesity's explosive growth is proving once again that his world class team is well on its way to creating another category-defining company," said Stuart Peterson, senior partner, ARTIS Ventures.

"We backed Mohit at his previous firm, Nutanix, and are proud to support him again at Cohesity. The company has a smart and timely vision for simplifying secondary data for large customers, which is part of a broader move by enterprises toward hybrid-cloud infrastructure. We believe Cohesity is armed with the right team and product to attack this large and growing market," said Neeraj Agrawal, general partner, Battery Ventures.

"I've had the pleasure of knowing Cohesity's founder and CEO Mohit Aron for nearly a decade, working with him closely as an investor for the last three years. A brilliant engineer, architect, and leader, Mohit is uniquely positioned to lead the enterprise IT transformation for secondary data. Cohesity's customer enthusiasm and market traction are a testament to the team's deep technical expertise, unique product vision, and implicit understanding of enterprise infrastructure and the cloud," said Karan Mehandru, general partner, Trinity Ventures.

"Cohesity's latest investment round is validation of the value their unique hyperconverged secondary data platform provides and their ability to adapt to industry trends towards hybrid cloud infrastructure. Their approach to simplifying the process for secondary data management and workloads at web scale is truly ground-breaking and we look forward to continuing to support them on their journey," said Quinn Li, VP and global head, Qualcomm Ventures.

"Companies can unlock enormous value by consolidating and simplifying the enterprise data center. Cohesity has designed the perfect platform to address this crucial opportunity in the face of organizations' multiplying volume and types of data generated across different non-primary systems. We're proud to have supported Cohesity's vision from the beginning, and we're excited to now see this new approach to secondary data take hold across the globe," said Gaurav Garg, founding partner, Wing Venture Capital.

Our Comments

The total of $410 million invested in Cohesity include:

Date Series Amount raised* Investors
11/2013 A 15 Sequoia Capital, Wing Venture Capital
5/2015 B 55 ARTIS Ventures, Qualcomm, through its venture investment group, Qualcomm Ventures, with additional investment from Accel Partners, Battery Ventures, Google Ventures, Trinity Ventures
3/2017 C 90 GV (Google Ventures) and Sequoia Capital, Cisco and Hewlett-Packard Enterprise took significant positions in this round as well, also participated Accel Partners, ARTIS Ventures, Battery Ventures, DVHC (formerly Danhua Capital), Foundation Capital, Qualcomm Ventures, Trinity Ventures and Wing Venture Capital
6/2018 D 250 SoftBank Vision Fund with strong participation from Cisco Investments, Hewlett Packard Enterprise, and Morgan Stanley Expansion Capital, along with early investor Sequoia Capital and others

 * in $ million

$250 million is the highest amount for a single round of financing since 2015 for a storage start-up.

This year the former record was $60 million by Scality. There were only 17 rounds from storage start-ups from January 2018 up to now, to be compared to 46 in entire 2017 year.

Highest rounds in 2018

Start-up Amount raised* in 2018 Total raised*
Cohesity 250 410
Qumulo 96 223
Scality 60 152
RStor 45 45
Nantero 29.7 120

* in $ million

Total funding of $410 million was historically the fifth highest amount raised by a storage start-up.

Historical records in total financial funding
(more than $200 million, no one in 2016, four more in 2017, one in 2018)

Start-ups Total financial funding*
Cloudera 1,041
Box 554
Pillar Data Systems 544
Pure Storage 470
Cohesity 410

* in $ million

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Top Fastest Growing Storage Companies in 2017
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