Swiss Data Backup Startup Veeam Raises $500 Million

(Bloomberg) -- Swiss data-backup company Veeam Software just won a $500 million vote of confidence from its backers, the company plans to announce Wednesday. The funding round, the largest startup financing since last summer, comes just one day after rival Rubrik Inc. announced it had raised $261 million—underscoring investors’ extreme interest in the data management industry.

Veeam is the latest richly backed startup to delay an initial public offering indefinitely. The funding round “gives us the freedom and flexibility not to go public,” said Ratmir Timashev, co-founder and executive vice president for marketing and sales at Veeam. “If we want to acquire somebody, we have enough cash. We don’t have to go to our stock.”

The hybrid venture and private equity firm Insight Venture Partners led the new financing, after investing an undisclosed sum in Veeam in 2013. The Canada Pension Plan Investment Board, which routinely makes direct investments in private companies, also participated. The startup declined to disclose its valuation.

Veeam, founded in 2008, operates in an industry where competitors can also draw on massive resources without having to go public. Aside from Rubrik’s hefty fundraising track record, enterprise storage company Cohesity Inc. also raised $250 million in a round led by SoftBank Group Corp.’s Vision Fund last year.

Veeam’s annual revenue is just shy of $1 billion, Timashev said, driven by customers’ eagerness to embrace off-premises cloud-based data storage. This year, the company projects cash flow of $300 million, and profits after interest, taxes, depreciation and amortization of $100 million. 

“We see Veeam as having the potential to further distance itself from the rest of the market,” said Insight Venture Partners managing director Michael Triplett. “It’s fairly rare that in 10 years a company goes from nothing to a billion in sales.”

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