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Insight Venture Partners Invests Incredible $500 Million in Veeam

With strong participation from Canada Pension Plan Investment Board

Veeam Software, Inc. announced that Insight Venture Partners has invested $500 million with strong participation from strategic investor Canada Pension Plan Investment Board (CPPIB) to accelerate the next phase of its growth in data management solutions for the public and private cloud.

Veeam will leverage Insight Venture Partners’ internal business strategy arm, Insight Onsite, and capital to accelerate its expansion through both organic growth and M&A activities.

The software firm is one of the largest privately held software companies in the world, with approximately $1 billion in sales and more than 325,000 customers, adding 50,000 new customers every year. It has been growing organically over the last 12 years in a rapidly expanding cloud data management market that enterprises annually spend an estimated $30 billion (1) to address. Testament to this growth, Veeam touches more production environment workloads than any other systems management company in the market.

The Veeam global ecosystem includes 60,000 channel partners, Cisco, HPE, Lenovo and NetApp as exclusive resellers, and more than 21,000 cloud and service providers.

We have a long-standing relationship with Jeff Horing and Michael Triplett from Insight Venture Partners, having worked with them since 2002 when Insight invested in our first company, Aelita Software,” said Ratmir Timashev, co-founder and EVP, sales and marketing, at Veeam. “Back then, we relied on Insight to provide strategic counsel and support, and after we sold that company to Quest Software in 2004, we continued our relationship. Over the years, Insight has been a trusted advisor to Bill Largent, Andrei Baronov and me, even acquiring a minority share in Veeam back in 2013. Today, Veeam is leading the data management space, with more than 325,000 customers, 60,000 partners, 82% of the Fortune 500 relying on our solutions, and with industry analysts heralding us as leaders across all sectors; with Insight and CPPIB’s, investment I know we will take this to the next level.”

Over the past decade, Veeam has established itself as the premier vendor for on-premises backup and recovery software, and is now No.1 in the market for providing data management for public and private cloud environments. Only great companies like Amazon and Apple have been able to pivot into market leading positions in multiple markets, and Veeam now joins this elite group,” commented Michael Triplett, MD, Insight Venture Partners, and member of the board of directors at Veeam. “Veeam has unparalleled leadership in terms of technology, vision and go-to-market strategies, which we believe will only further extend its No.1 market position. Insight is thrilled to continue this journey with Veeam’s management.

Insight Venture Partners’ investment validates the vision and direction laid out by Veeam’s executive leadership team – to be the most trusted provider of backup solutions that enable intelligent data management, and, through the Veeam Availability Platform, deliver agility, availability and business acceleration to customers across the globe. Leveraging Insight Venture Partners’ expertise, the investment will enable Veeam to accelerate its growth trajectory through both organic growth – i.e. portfolio innovation and expanding its geographical footprint – and via M&A activity which will drive Veeam’s expansion into adjacent markets.

Pursuant to the terms of this investment Insight Venture Partners’ MD, Michael Triplett, will join Veeam’s board of directors.

Gordon R. Caplan, co-chairman, Willkie Farr & Gallagher LLP., served as advisor for the deal.

(1 ) Market sizes forecasted through 2021; CAGRs represent a three-year forecasted period.

 

Comments

Veeam never to got officially financial funding since its inception in 2006.

We asked the following question in September 2018 to Peter McKay, co-CEO of the company as this time co-CEO of the company and replaced as CEO one month later by Andrei Baronov.

Did you ever had financial founding rounds? How to you do to finance the company?
No, we never did founding rounds. The two founders of Veeam [Andrei Baronov, Ratmir Timashev both born in Russia, Ed.] sold a company and build Veeam with the proceeds of that sale. Veeam has been self-funded and cash flow positive ever-since, no debts or ventures.
So why aren't you doing an IPO?
The better question is "Why do an IPO?" If the company is profitable and we have a lot of cash, then why bother? Companies who go public usually want to use the money to go buy other companies or liquidate their investors or something. We only have two major shareholders, the two founders.
If you're note planning on doing an IPO, is a sale conceivable?
Our goal is to continue to run a fast-growing and profitable software company. So every year we take a look at the company and ask ourselves "Do we keep going the way we're going or should we take a different route? Should we go public?" That's not off the table. We're not looking for someone to buy us either, but if someone came and said "Hey look this is a great business" we wouldn't say no. All the options are on the table at any time.

The company changed his mind.

Half billion dollar is an enormous sum impossible to refuse to expand and never reached by a storage start-up for just one round but Vexenta ($900 million in 2014). Few days ago Rubrik got also a comfortable financial round at $261 million.

Fast growing Veeam, privately-owned and profitable since 2009, is currently the most successful company in the world in storage backup software for virtualization environments, taking market shares since several years vs. big historical firms like Commvault, Veritas or Dell EMC.

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