Storage technologies are beginning to overtake traditional HDD and hybrid solutions thanks to decreased cost, increased performance capabilities, and increased reliability. As computing needs become more sophisticated, data centers are evolving to meet the growing demand for infrastructure that’s natively designed to handle AI, ML, and large-scale applications. VAST Data offers managed software and storage solutions that allow enterprises to adopt all-flash architecture for their data center needs in a turn-key, reliable solution. The pandemic accelerated digital transformation for many organizations, creating a surging demand for data solutions, and VAST was able to close out 2020 at an impressive $100M annual run rate (ARR).
AlleyWatch caught up with Founder and CEO Renen Hallak to learn more about the company, future plans, latest round of funding, which brings the total funding raised to $263M, and much, much more…
Who were your investors and how much did you raise?
Today we announced an $83 million Series D round of funding. This round was led by a new investor, Tiger Global, and included reinvestments from our partner Nvidia as well as other existing investors.
Tell us about the product or service that VAST Data offers.
VAST Data’s Universal Storage is a managed software offering that helps customers unlock the value of their data and modernize data centers in preparation for the era of AI computing. VAST delivers real-time performance to all data and overcomes the historic cost barriers to building all-flash data centers.
What inspired the start of VAST Data?
We saw data growing at unprecedented levels, but the speed at which data could be accessed wasn’t growing at all. This meant only a small subset of information was accessible. With rapid advances in AI, it was clear that the number one obstacle to the adoption of these new applications was fast access to vast data sets. That is what we set out to solve.
How is VAST Data different?
Ending 30 years of cost and complexity from legacy storage architectures and consumption models, VAST’s Universal Storage offering is delivered to customers as a simple managed service on hardware they can now buy directly from our manufacturing partner, at cost. Customers now get the complete hardware cost transparency and buying power that hyper-scale cloud providers enjoy, but at the same time, Universal Storage is delivered to their doorstep as a simple, turnkey appliance complete with white-glove support from VAST.
What market does VAST Data target and how big is it?
VAST serves enterprise and public sector customers with large data requirements (generally measured in the petabyte to exabyte scale). Key verticals include healthcare, life sciences, financial services, automotive, media & entertainment, and many others. We view our addressable market in excess of $30 billion and growing rapidly.
What’s your business model?
VAST delivers infrastructure software licensed by data capacity. We work closely with our hardware manufacturing partner to ensure the solution is delivered to our customers as a simple turnkey appliance.
How has COVID-19 impacted the business?
Our business has continued to grow despite the pandemic. We have the privilege of serving many customers working on testing, vaccines, and preventative measures, and are proud of the work they are able to accomplish leveraging VAST technology.
What was the funding process like?
Coming off of a record year, we received inbound interest from several investors. We chose to partner with Tiger Global and tighten our partnership with Nvidia, while growing our balance sheet to $230M.
What are the biggest challenges that you faced while raising capital?
We believe in focusing on growing the business as fast as possible and as efficiently as possible. We do it by building innovative products that solve our customers’ pain points, and by focusing on delighting our customers. If you do all that, which incidentally is very hard to do, raising capital is not very challenging.
What factors about your business led your investors to write the check?
It was a combination of past performance and forward-looking vision. Two numbers in particular that stood out were Net Dollar Retention (328%), which indicates that customers buy a lot more of the product once they start using it. The other, the Rule of 40 (342%), which measures the balance between revenue growth and free cash flow and indicates that we were able to grow 4x YoY without burning cash. Looking forward, we are in the process of growing beyond just the storage offering, to provide our customers with the infrastructure stack required by next-generation applications.
It was a combination of past performance and forward-looking vision. Two numbers in particular that stood out were Net Dollar Retention (328%), which indicates that customers buy a lot more of the product once they start using it. The other, the Rule of 40 (342%), which measures the balance between revenue growth and free cash flow and indicates that we were able to grow 4x YoY without burning cash. Looking forward, we are in the process of growing beyond just the storage offering, to provide our customers with the infrastructure stack required by next-generation applications.
What are the milestones you plan to achieve in the next six months?
We are growing all parts of the team, and specifically growing internationally in EMEA and APAC. We intend to maintain our growth rate and efficiency levels, while continuing to serve our customers with a focus on their long-term success.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
We are big believers in building a lean organization. We don’t have fancy offices, or admins, or costly perks. While having money in the bank means you have one less thing to worry about, you don’t need money to create the type of magic upon which startups thrive. Creativity trumps capital every time, and lack of capital forces you to focus on the things that matter most.
Where do you see the company going now over the near term?
Our focus has always been and remains on serving our customers with an emphasis on providing the infrastructure stack needed for their long-term success.
What’s your favorite outdoor dining restaurant in NYC?
The food trucks outside our office, right next to Bryant Park. Especially the Ethiopian one.
