Data storage company Actifio raises $100m
Actifio, a data-storage operation, has raised $100 million in new funding, one of the largest investment deals for a privately held Boston-area technology company in recent years.
The funding round valued the Waltham company at $1 billion, more than for a number of publicly traded tech companies in the area, including Brightcove, Constant Contact, and Care.com.
Rarely has Boston had a venture capital-funded tech firm achieve a billion-dollar valuation prior to going public.
A report by Dow Jones VentureSource in 2012, for instance, found 20 venture-backed US companies that sported such valuations, and just one, Kayak, had a major presence in Greater Boston.
Actifio Inc.’s founder and chief executive, Ash Ashutosh, said the company raised the money to accelerate its growth, particularly its global expansion, and to help potential customers feel assured about the viability of the company. Some companies have been looking at spending several million dollars with Actifio over several years, he said.
“We decided we wanted to solve the viability issue and also to double down on investing,” Ashutosh said. “So either we could go public, but we’re not quite ready for that one yet — plus there’s really no need without much competition — or we could raise $100 million at a $1 billion valuation.”
Actifio had interest from investors that could have enabled it to raise even more funding, “but at some point you stop,” he said.
Actifio’s technology works to reduce data-management costs by as much as 90 percent, by dramatically reducing the number of copies of data that need to be made. The system works by virtualizing the data, decoupling it from the physical storage.
While the promise of cost savings opens the door for Actifio to speak with potential customers, “what people get delighted about is the speed with which they can access information,” Ashutosh said.
A process for accessing data that used to involve numerous steps and take weeks “is now taking a minute and a half,” he said. “You dial the knob back a month and instantly have the data — it’s like a time machine.”
Actifio reports it has more than 300 customers, among them Sanofi, Unilever, HBO, and Netflix.
The average deal size with Actifio last quarter was $388,000, Ashutosh said, and total revenue for 2014 was more than $40 million. (A specific figure isn’t being disclosed.)
Actifio is targeting its initial public offering of stock for mid- to late 2015, Ashutosh said.
“Ash has assembled a tremendous team that I think has the ability to build a big company here in New England,” said Bob Hower, partner at Advanced Technology Ventures.
The new funding round was led by Tiger Global Management, a New York investment firm that backed Facebook and Linkedin when those companies were still private.
Advanced Technology Ventures also took part, as did Andreessen Horowitz, North Bridge, Greylock, and Technology Crossover Ventures.
A news release on the funding includes a quote from Marc Andreessen:
“Actifio’s copy data virtualization makes data available when and where you need it, just as server virtualization did for compute in the current generation of data centers. In the data center of the future, that’s going to be a very big deal.”
Actifio said it closed $75 million of the funding on March 14, and the rest is committed to the company by April 7.
Actifio has now raised $207 million since its founding in 2009, making it the second-best-funded private tech company in the Boston area, behind Wayfair.
A Boston e-commerce site, Wayfair has raised the only $100 million round in Boston tech circles in recent years, with $165 million raised in 2011 and $157 million closed this month.
A year ago, Actifio had raised $50 million in a Series D round that valued the company at $500 million.
Actifio now employs 280, with about 120 of them in Massachusetts, and expects to end the year with about 350 employees, Ashutosh said.