From Pune to Sunnyvale, enterprise IT firm Druva's journey to raising $118 mn
In the less flashy world of enterprise IT, public cloud data backup and recovery firm Druva Inc. has managed to turn the spotlight on itself in a rather short span of time.
The company, which was founded in Pune eight years ago and is now based in the US city of Sunnyvale, on Wednesday announced its latest fundraising round in which it secured $51 million from Sequoia India, Singapore Economic Development Board's investment arm EDBI and other investors.
The company's spokespeople, including founder and CEO Jaspreet Singh, fiercely protect information on valuation and revenue, just as they help clients protect their data. But according to people familiar with the transaction, the latest round has put its valuation well above a half-billion dollars.
That's not really a surprise for a company that counts US space agency NASA, drug behemoth Pfizer, hospitality giant Marriot and defence equipment maker Lockheed Martin among its 4,000 clients, and which has managed 25 petabyte data (25 million GB) on cloud.
The company was founded in 2008 by IIT Guwahati alumnus Singh along with Milind Borate and Ramani Kothandaraman—all former employees of storage management firm Veritas. But the business started getting real traction only six years ago, Singh told TechCircle on a telephonic interview from the US. "The first two years were more of a soul searching for us."
He said the product and the business plans were ready by the time the company received its first institutional funding from Sequoia Capital India in 2010. For Singh, Borate and Kothandaraman—who left the firm two years ago—the initial thought process revolved around finding simpler solutions to address the complexity of data management and protection in the distributed world.
"Data is no longer locked down to data centres and mainframes. Data is all around. But at that time we did not know the answer was cloud," said Singh.
They did eventually figure that cloud made the most sense in data management.
Singh said it took the company some time to build intellectual property and launch the product. "When we launched the product there was instant pull from the market," he recalled.
Druva's first product, inSync, provided backup and helped manage end-user information for enterprises across multiple laptops and fitted well with the shift toward the bring-your-own-devices culture in large enterprises and helped it gain traction.
Its product-led business also gained many takers in the investor world starting from Sharad Sharma, former CEO of Yahoo India R&D and co-founder of IT product industry group iSPIRT. Nexus Venture Partners led its Series B round and Silicon Valley fund Tenaya Capital led Series C. Japanese telecom giant NTT's investment arm, too, has backed Druva. In total, it has raised $118 million in six rounds, including $25 million each in 2014 and 2013. Along the way, the company moved its headquarters from India to Silicon Valley and opened sales offices in Germany, Singapore, Japan and the UK.
"As appetite for cloud evolved, we evolved over time and placed an anchor on cloud and built various business cases around data protection and management," Singh said.
Druva remains a heavily IP-driven business. It has filed for seven patents in the US and received three. "We now file for one patent almost every quarter, three to four a year," he added.
Over a fourth of the 400 employees of Druva, working mainly out of its Pune and Sunnyvale offices, are in research and development, churning out intellectual properties that would drive growth.
While capital inflow and revenue growth are steady, break-even is still some time away for Druva. "We are not profitable yet but we are not burning a lot of money. We reinvest, especially in sales and marketing," Singh said.
According to him, it is up to the company to decide whether it should continue to invest in growth or churn out some cash. And he expects Druva will break even next year.
So, what next? Singh said there are numerous problems to be solved in the data protection arena and that offers Druva a good visibility to achieve certain revenue goals by the end of next year. "That is when we will decide the timing of our IPO," he said.
According to a personal familiar with the company's plans, the latest fundraising will be its last round before a possible initial public offering.
In the world of enterprise IT, promising young companies often fold into cash-rich technology behemoths. "That is definitely a possible outcome. But given what we are building, our fundamental belief is that this could be a large standalone company with a very large market cap," Singh said.
"That said, if a good offer comes we would consider," he added. "We are not blind to it but our core focus is on the IPO."
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