VAST Data has announced a Series E funding round, raising $188 million. Led by Fidelity Management & Research Company and accompanied by New Enterprise Associates (NEA), BOND Capital and Drive Capital. The round also saw the company attain a valuation of $9.1 billion. Nearly tripling the valuation from two years in 2021, from 3.7, when it raised $83 million in its Series D funding round.
VAST Data provides a platform that unifies storage, database and compute in a single platform. This is designed to meet the needs of AI. It achieves this using its DASE Architecture, which decouples compute logic from the system state, introducing shared and transactional data structures. It allows organisations to bring together data and compute power from wherever it is located geographically without the drawbacks of legacy and often siloed architecture. This is an AI-centric architecture and one that is data-centric.
Renen Hallak, CEO and Co-Founder of VAST Data commented, “A new AI data stack is required. To be truly impactful in this era of AI and deep learning, you not only want to have a lot of data, but also high-quality data that is correctly organised and available at the right place, at the right time. The VAST Data Platform delivers AI infrastructure that opens the door to automated discovery that can solve some of humanity’s most complex challenges.”
The press release revealed that Vast Data intends to use the funding to advance its “mission to deliver a new category of infrastructure that puts data at the centre of how systems think, react, and discover.” Enterprise Times asked VAST Data how it would achieve this. However, no further detail was provided.
Presumably, VAST Data will continue to invest in new partnerships such as those it announced with CoreWeave, Lambda and Core42 (formerly G42 Cloud). The partnership with Lambda aims to speed up AI training in both public and private clouds.
It will also look to invest in the next version of its platform. It recently released version 5.0, which extended its capabilities with AWS and added several new features. This update, VAST Data believes, can help customers achieve an 80% reduction in their cloud costs!
Heading towards an IPO
Typically, firms at Series E and beyond are considering an IPO. There are several thresholds that the market wants to see. Enterprise Times asked Hallak where the company is on that journey.
He replied, “The next natural step is to prepare for being a public company. We are running the company today as if it’s public. From a business perspective, VAST has had positive cash flow for the past few years with a gross margin of nearly 90%. There are a few more things that we need to do from the company-building perspective to be ready in terms of predictability of our ability to give guidance, in terms of having the systems in place for compliance. We’ll need a few more quarters to build that out, but we don’t have a specific time frame for an IPO in mind.”
What about the investment? Fidelity Management & Research Company (FMR Co.) acts as the investment advisor to Fidelity’s family of mutual funds. It manages $681.3 billion of mutual fund assets. It will now become a board observer, which indicates that its share ownership is minimal compared to some other investors.
However, Scott Sandell, Chairman, CEO and CIO at NEA, who also participated in the round, commented, “We believe that VAST Data is a pioneer in the AI GPU space. With deep learning at the centre of the massive AI movement we are experiencing. Interest and investment in VAST Data has escalated, and we are thrilled to partner with the VAST Data team as they drive influence and innovation in the global AI technology sector.”
The funding round feels like VAST Data is just raising more capital, leveraging its profitability to do so without diluting the ownership much. Effectively, the round was only 2% of the total valuation. The question is, what will it do with the funds?
VAST Data has had a successful year. It has more than $1 billion in cumulative software booking and has achieved 3.3x years over year growth. Hallak revealed some other key financial metrics earlier. The firm revealed that it also broke $100 million in ARR in March and continues to add an impressive array of Enterprise customers. The company now has over 700 employees with offices in the US and Israel. It also has an office in London and is looking to expand further in APAC, the Middle East and Europe.
Eric Bermender, Head of Data Center & IT Infrastructure Pixar Animation Studios, commented, “VAST is allowing us to put all of our rendered assets on one tierless cluster of storage, which offers us the ability to use these petabytes of data as training data for future AI applications. We’ve already moved all of our denoising data, ‘finals’ and ‘takes’ data sets onto the VAST Data Platform, specifically because of the AI capabilities this allows us to take advantage of in the future.”
Partnerships are also important to VAST Data as it continues to break boundaries and push the limits of AI deployments even further. The VAST Data platform achieved NVIDIA DGX SuperPOD certification in May 2023. In April 2023, it entered into a strategic partnership with HPE. Which saw it embed its software platform into the new HPE GreenLake for File Storage service. With the increased concern around security, VAST Data also extended its strategic partnership with CommVault in June. With the intention to deliver more tightly integrated data protection and security solutions to customers and partners.
Manuvir Das, Vice President of Enterprise Computing at NVIDIA, commented, “Data is every company’s most valuable asset. NVIDIA and Vast Data are collaborating to enable enterprises to harness their data using accelerated computing and cloud-based AI solutions to tackle their biggest challenges.”
Enterprise Times: What does this mean
There is little information about what VAST Data intends to use this cash injection for, whether it is international expansion, product development or acquisitions. It currently has open positions across several countries, including the US, Israel, Japan, Germany, the Netherlands, Singapore, India and Canada. There is no sign of new office announcements yet. But as the numbers in the UK are around 40 (according to LinkedIn), it seems likely it will formally announce something there or at least list it on its website.
It will be interesting to see what 2024 brings. How it grows its ARR and whether it can maintain its leadership against other vendors. It may also be a tempting target for AWS. Though a significant acquisition, there could be benefits for both parties in that it would give VAST Data faster access to a wider geographic reach.