CAST AI has raised a little over $20 million (Source Form D submission to SEC) in a new funding round led by early-stage venture capital firm Creandum. Creandum invested $15 million into the leading all-in-one platform for Kubernetes automation, optimization, security, and cost management. The remaining $5 million was contributed by CAST AI’s original investors, including Cota Capital, which led the Series A funding round in October 2021. Other investors in the Series A round included Samsung NEXT and Florida Funders.
Yuri Frayman, CEO of CAST AI, commented, “This funding is just in time to take advantage of the tremendous opportunity in the market as more and more companies transition to containerized applications in the cloud. With this investment, we can further grow our position as a leading provider of intelligent cloud optimization solutions globally as well as expand our all-in-one platform capabilities to more cloud-native ecosystems and use cases.”
CAST AI aims to make the move towards containerisation cost-effective for companies. Its recent State of Kubernetes overprovisioning report identified that organisations overspend by 60% as they overprovision containerised applications. The CAST AI platform aims to reduce this overspending, and the ROI is rapid for many customers.
To achieve this, it offers three main services Cloud cost optimisation, Kubernetes cost monitoring and Container security, the second two of which are free add-ons. The cost optimisation module continuously analyses and optimises resources, suggesting changes that users can act on to decrease costs. The platform leverage AI and automation to analyse and optimise compute resources quickly.
A huge market opportunity
Creandum will have noticed the rapid growth in the Containerisation market. Research and Markets recently estimated that the global market for Application Containers was US$5.7 Billion in 2022. It is estimated to reach $44.6 billion, growing at a CAGR of 29.2% by 2030. The monitoring and security segment of the market is estimated to grow by 30.7% CAGR over the next eight years.
This is the significant opportunity that CAST AI hopes to take advantage of and bring sustainable cost management to enterprises investing in Kubernetes. Customers have proven the savings they can achieve. Global mobile analytics leader Branch is already achieving millions of cost savings each year. Other recent wins include social media unicorn ShareChat, which estimated it would save tens of millions of dollars using the platform. The Adtech company, Iterable, has already calculated its savings.
Jason Sanghi, Staff Software Engineer, SRE, at Iterable, commented, “When you start talking about those numbers, leadership cares, finance cares, they start building it into their cost projections and estimates. Even 1 or 3% of a massive AWS bill is significant. So when you say numbers like 20%, people are losing their minds. And our total possible savings take that 20% closer to 60 or 70%, which translates to $3-4 million per year. So that’s just an insane amount of savings. You can hire more people, you can spend more on infrastructure in other places.”
Since CAST AI launched its platform, it has achieved 220% revenue growth every quarter. This and the opportunity in the market were undoubtedly a powerful argument for Creandum to invest.
Carl Fritjofsson, General Partner at Creandum, commented, “CAST AI’s explosive growth is unheard of in this macro market. This demand really shows how unique and powerful the company’s solution is. We believe the needs for DevOps automation will only grow from here, and can’t wait to see CAST AI become the leader in the cloud optimization space.”
Enterprise Times: What does this mean
As companies are waking up to realise that the cloud is not always cheaper than on-premise solutions, they are looking for additional cost savings in the uncertain economic climate. CAST AI offers one solution to achieve those cost savings with plenty of evidence that it can help control an element of cloud overspending.
What is missing from this announcement is how CAST AI will invest this money. Will it focus on product, investing in R&D? Or will it look to expand its go-to-market?
CAST AI positions itself as an all-in-one platform for cloud-native applications. Users can benefit from the full suite of solutions, including cost monitoring, autoscaling, spot instances automation and container security. Looking at its Careers page, the current opening seems more focused on R&D than sales and marketing recruitment.
