Computational power is at the center of AI. Increased performance capabilities and increased reliability of GPU-accelerated computing for use with models provide time savings, increased accuracy, and the flexibility to fine-tune models efficiently. VAST Data is an AI infrastructure platform that manages natively designed hardware to handle AI, ML, and large-scale applications with managed software and storage solutions. The platform works both at data centers as well as in the cloud to allow enterprises to develop data architecture that is scalable and seamless with an approach that is focused on insight and action. As AI evolves beyond performing automated routine tasks to an era where AI is autonomously generating insight and competitive intelligence without human prompts, VAST Data is intent on providing the infrastructure and architecture to make this a reality. Since its last funding round in 2021 the company has tripled its valuation and is doing $200M in ARR with a gross margin slightly under 90%.
AlleyWatch caught up with VAST Data CEO and Founder Renen Hallak to learn more about the business, the company’s strategic plans, latest round of funding, which brings the company’s total funding raised to $381M and much, much more…
Who were your investors and how much did you raise?
VAST Data secured $118M in Series E funding, nearly tripling the company’s valuation to $9.1B. The funding round is led by Fidelity Management & Research Company and accompanied by New Enterprise Associates (NEA), BOND Capital, and Drive Capital.
Tell us about the product or service that VAST Data offers.
The VAST Data Platform unifies storage, database, and containerized compute engine services into a single, scalable software platform built from the ground up to power AI and GPU-accelerated workloads in modern data centers and clouds. The platform uniquely enables organizations to understand all data, both structured and unstructured as it exists in the natural world, to generate superior insights and unlock new value.
What inspired the start of VAST Data?
VAST Data was founded in 2016 with a strategic vision to completely rethink and re-architect what a modern, AI data platform should be, breaking the fundamental tradeoffs between scale, performance, resilience, price, and ease of use faced by enterprises using legacy systems.
In 2015, I realized that existing systems and architectures would not be good enough for this new era of AI and deep learning. Larger systems were required to store natural data – pictures, videos, genomes, sound, natural language. Faster systems were required to feed hungry GPUs vs. slow CPUs. Both of these abilities were required at the same time, and the old way forced you to choose between the two. A new architecture was required to break long-standing tradeoffs between scale and performance. The culmination of this resulted in VAST Data, which has subsequently designed a new architecture, and developed the software infrastructure layer required to leverage the latest in hardware technologies while providing the easiest APIs up to AI applications.
The company operated in stealth mode until 2019 when VAST began selling to customers. I founded the company with three other cofounders:
- Jeff Denworth, co-founder, previously held management positions at DDN, CTERA Networks and Cluster File Systems.
- Shachar Fienblit, Chief R&D Officer, previously held leadership roles at Kaminario and IBM.
- Alon Horev, Vice President of Technology, worked previously at Cisco and IBM designing and implementing innovative database and storage platforms
How is VAST Data different?
The VAST Data Platform delivers limitless scalability, enterprise-grade security, and its disaggregated nature offers the data access, efficiency and resiliency preferred by many of the world’s most data intensive organizations.
VAST was built in the AI era, bringing with it a significant advantage that allows the company to leverage more modern technologies when developing this new architecture. VAST was built from the ground up for the scale and performance required by AI systems.
What market does VAST Data target and how big is it?
VAST Data operates in the AI and data management market. The AI market is projected to reach $305.9B by the end of 2024.
We’re on the brink of “AI-automated discovery,” – the potential to evolve AI from LLMs, which are currently limited to performing routine tasks, like business reporting or collating and synthesizing known information – into data and event-driven triggers, where AI is autonomously seeking answers to questions unprompted by humans as new, natural, rich data enters a dataset.
We’re on the brink of “AI-automated discovery,” – the potential to evolve AI from LLMs, which are currently limited to performing routine tasks, like business reporting or collating and synthesizing known information – into data and event-driven triggers, where AI is autonomously seeking answers to questions unprompted by humans as new, natural, rich data enters a dataset.
This era of AI-driven discovery will accelerate how enterprises realize the full potential of their data, and through their innovation, help solve some of humanity’s biggest challenges.
What’s your business model?
VAST is a software company that runs on commodity hardware, and because the architecture the VAST Data Platform is built on is disaggregated, VAST enables organizations to scale more efficiently than competitors, allowing customers the flexibility to pay only for what they use.
VAST is 100% channel-led, and our partners are the backbone of VAST Data’s growth and expansion strategy. Their deep industry expertise and client relationships amplify our market reach. As we continue to scale, partners play a pivotal role in capturing new opportunities, reaching untapped markets, and ensuring customer success. Our growth is inherently tied to the success of our partners, and by empowering our partners to thrive, we ensure sustained revenue growth, making them indispensable contributors to our success in the competitive tech landscape.
How are you preparing for a potential economic slowdown?
The explosion of interest in AI and the need for modern infrastructure that can support these workloads in the last year has been a boon for VAST’s business and positions the company for continued growth and adoption with the enterprise. Given the future-proof nature of VAST’s offering, data-driven organizations see VAST as a valuable investment in the future of their business. VAST has been generating cash for the past 12 quarters.
What was the funding process like?
Since VAST is cash flow positive, our funding rounds tend to be reactive. We often get inbound interest from investors. Funds like FMR, NEA, Bond & Drive are the best funds in the world, with individuals who have built and guided the building of the best companies in the world. When they expressed interest, seizing the opportunity to partner with them was the only logical reaction. Once we found the right partners, they got to know us and decided they wanted to move forward, and agreeing on the terms of the deal was the easy part.
What are the biggest challenges that you faced while raising capital?
Deciding to partner requires building trust between the company and its new investors. Unfortunately, this usually needs to happen rather quickly, and in parallel to continually building the company. It is not easy to find time to really get to know each other under the allotted time frame. We were fortunate to find such great people in these investment funds, which made it a very easy decision on our end to move forward.
What factors about your business led your investors to write the check?
At the end of FY’Q3, VAST Data surpassed $1B cumulative software bookings and $200M in annual recurring revenue (ARR). The company achieved 3.3x year-over-year (YoY) growth and maintained positive cash flow for the last 12 quarters with a gross margin of nearly 90%.
What are the milestones you plan to achieve in the next six months?
We intend to continue growing the business at an exponential rate, while expanding many of our GTM partnerships and bringing to market new functionality across all four parts of the VAST Data Platform – the VAST DataStore, the VAST DataSpace, the VAST DataBase and the VAST DataEngine.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Focus on building the best product and making customers happy. Other customers will hear about the offering through word of mouth and other industry validation. Investors will be attracted to them consequently, and a virtuous cycle will ensue.
Where do you see the company going now over the near term?
VAST is committed to continuing to help our customers derive more and more value from their data with a simple, performant, scalable, and efficient data platform solution. With the VAST DataEngine becoming available in 2024, VAST offers enterprises a full suite of data management capabilities with infrastructure that was built for AI and deep learning.
You can also expect to see VAST continue to grow and expand its partnerships with companies like NVIDIA and HPE.
What’s your favorite winter destination in and around the city?
I always know it’s winter when they start setting up the Winter Village at Bryant Park. It is close to our midtown office, and enjoying a cup of hot chocolate while watching the ice skaters is the epitome of winter in New York.
