HYCU locks down additional funding to grow its cloud data protection business

Hybrid Cloud Up Time (HYCU), a self-described “backup-as-a-service” company for customers managing hybrid and multi-cloud environments, today announced that it raised $53 million in a “majority equity” Series B round led by Acrew Capital with participation from Bain Capital Ventures, Atlassian Ventures, and Cisco Investments. In an email interview with TechCrunch, CEO Simon Taylor said that the proceeds will be put toward expanding HYCU’s 300-person team with a particular focus on customer success and partnerships as well as funding the development of new products and services, including a software-as-a-service product.

HYCU was spun out of Comtrade Software, an IT solutions company based in Belgrade, Serbia, with offices in Dublin, Amsterdam, and Ljubljana. Comtrade — having sold the intellectual property of data monitoring software it created for Citrix and Microsoft — realized it could develop and sell data protection products through its own channels. The company decided to spin out HYCU while retaining a majority ownership and focusing on integration and outsourcing.

In 2018, Taylor was appointed CEO of HYCU (pronounced “haiku”), which is based in Boston — where Comtrade Software has a fourth outpost.

“HYCU is … focused on data resiliency,” Taylor said. “The emerging threat to the explosion of data is too important to take risks on. In addition, the emergence of multi-cloud and hybrid cloud where companies are migrating more workloads and apps from on-prem to public cloud is accelerating at an unprecedented rate. Lastly, the number of data silos within enterprises is increasing as well. All of these are reasons why our current and new investors are working with HYCU to address these challenges.”

HYCU offers software designed to protect data across multi-cloud and hybrid cloud environments. While “multi-cloud” and “hybrid cloud” both refer to deployments with more than one cloud, they differ in the kinds of infrastructure involved. A hybrid cloud blends two or more different types of clouds (e.g., an on-premises data center and public cloud like Amazon Web Services), while multi-cloud combines different clouds of the same type (e.g., Amazon Web Services and Google Cloud Platform).

Specifically, HYCU sells products — most of them self-serve — for cloud migration, security credential management, disaster recovery, and backup and recovery. Taylor sees the company’s offerings as competitive with legacy data protection providers with roots in mainframes, app-based data protection and management companies, and cloud-native, “backup-and-recovery-as-a-service” vendors

“HYCU experienced much of its growth during the pandemic. Much of that was driven by the need to simplify the ransomware recovery experience,” Taylor said. “The pandemic also saw the fastest rise in the use of multi-cloud systems. Many data protection solutions were developed before public clouds existed, and people began to realize the responsibility of protecting cloud data.”

There’s certainly no shortage of competition in the data backup and recovery sector. In our coverage of HYCU’s Series A, my colleague, Ingrid Lunden, noted three major rivals: Rubrik, Veeam, Veritas, and CommVault. Veeam was acquired by Insight in 2020 for $5 billion. As of early 2019, Rubrik was valued at a whopping $3.3 billion.

In 2019, IDC estimated that the market for data replication and protection software was worth $9.4 billion. It’s almost certainly grown since. Over 80% of companies responding to Flexera’s latest State of the Cloud survey reported having either a multi-cloud or hybrid cloud strategy.

Gartner predicted in a 2020 report that worldwide spending on information security and risk management technology and services would reach $150.4 billion in 2021, driven in part by high-profile ransomware attacks. At the same time, the analytics firm projected, spending on public cloud services would climb to $304.9 billion — up from $257.5 billion in 2020.

HYCU claims to be in a strong position for expansion, with a customer base totaling more than 3,100 organizations including U.S. state and local government agencies, the U.S. Department of Defense, and “multiple” branches of the U.S. military. In anticipation of courting future public sector clients, perhaps, HYCU recently announced support for AWS GovCloud, Amazon’s cloud regions designed to host sensitive data and regulated workloads.

“Wherever the need for cost-efficient, multi-cloud data protection as a service exists, we service those needs,” Taylor said. “HYCU is positioned to continue to thrive. We were approached to start a Series B and were able to do it at a time when many tech companies were challenged to raise money. Protecting data is a need that will always be present, especially as more data is created.”

To date, HYCU has raised $140 million.

Kaseya acquiring disaster recovery service Datto for $6.2B with help from consortium of investors

Datto, the disaster recovery service, has had an interesting history. It raised a cool $100 million as a startup including a $75 million investment in 2015, a significant round for that period. Vista Equity purchased the startup in 2017, but that wasn’t the end of its story, not by a long shot. Instead Vista built up the company and took it public in 2020.

Today, the journey took another twist when Kaseya, a provider of security and management services for internal IT departments and managed servers providers bought the company for $6.2 billion.

With Datto, Kaseya is getting a company that provides services related to backup and disaster recovery. Should something go terribly awry with your systems, Datto enables you to download the most recent backup and get going again. Fred Voccola, Kaseya’s CEO, sees the two companies having a lot in common, and the backup and recovery services fit nicely into Kaseya’s product portfolio.

“Datto has a legendary commitment to its customers and employees. The alignment of our missions and focus makes us a natural fit, that will help our greatly appreciated customers reach new levels of success,” Voccola said in a statement.

Under the terms of the deal, Datto shareholders will receive $35.50 per share, which represents a 52% premium over the company’s stock price on March 16th. It’s worth noting, however, that the stock price is soaring today on the news up over 20% and getting close to that offer price at $34.60 per share, as we were writing this story.

Kaseya is not forking over that kind of dough on its own, however. It’s getting help from a consortium of investment firms that includes Insight Partners with help from TPG and Temasek. Sixth Street and other unnamed investors are also participating.

In its most recent quarter, the last one Datto will be reporting as a public company, the company announced revenue of $163 million for the quarter, up 18% year over year. Datto shareholders and the board have already approved the deal. If it passes regulatory oversight, the acquisition is expected to close some time in the second half of the year.


Disaster recovery can be an effective way to ease into the cloud

Operating in the cloud is soon going to be a reality for many businesses whether they like it or not. Points of contention with this shift often arise from unfamiliarity and discomfort with cloud operations. However, cloud migrations don’t have to be a full lift and shift.

Instead, leaders unfamiliar with the cloud should start by moving over their disaster recovery program to the cloud, which helps to gain familiarity and understanding before a full migration of production workloads.

What is DRaaS?

Disaster recovery as a service (DRaaS) is cloud-based disaster recovery delivered as a service to organizations in a self-service, partially managed or fully managed service model. The agility of DR in the cloud affords businesses a geographically diverse location to failover operations and run as close to normal as possible following a disruptive event. DRaaS emphasizes speed of recovery so that this failover is as seamless as possible. Plus, technology teams can offload some of the more burdensome aspects of maintaining and testing their disaster recovery.

When it comes to disaster recovery testing, allow for extra time to let your IT staff learn the ins and outs of the cloud environment.

DRaaS is a perfect candidate for a first step into the cloud for five main reasons:

  • Using DRaaS helps leaders get accustomed to the ins and outs of cloud before conducting a full production shift.
  • Testing cycles of the DRaaS solution allows IT teams to see firsthand how their applications will operate in a cloud environment, enabling them to identify the applications that will need a full or partial refactor before migrating to the cloud.
  • With DRaaS, technology leaders can demonstrate an early win in the cloud without risking full production.
  • DRaaS success helps gain full buy-in from stakeholders, board members and executives.
  • The replication tools that DRaaS uses are sometimes the same tools used to migrate workloads for production environments — this helps the technology team practice their cloud migration strategy.

Steps to start your DRaaS journey to the cloud

Define your strategy

Do your research to determine if DRaaS is right for you given your long-term organizational goals. You don’t want to start down a path to one cloud environment if that cloud isn’t aligned with your company’s objectives, both for the short and long term. Having cross-functional conversations among business units and with company executives will assist in defining and iterating your strategy.

FireHydrant announces $23M Series B to grow disaster management platform

No matter how carefully you set up your systems, sooner or later something fundamental breaks. How you react during those times and how quickly you respond to the crisis is what people remember after it’s over. FireHydrant, a startup that helps companies prepare for and manage such crises, announced a $23 million Series B investment today.

Harmony Partners led the round with participation from Salesforce Ventures and existing investors Menlo Ventures and Work-Bench. Today’s money brings the total raised to $32.5 million, according to the company.

The company focuses on helping customers navigate a crisis and a big part of that is run books, which act as playbooks for handling various crisis situations as they arise. As part of that, the company has added a directory of service owners to make it easier to find the people in charge of a given service should it be the cause or impacted by an ongoing event.

Company co-founder and CEO Robert Ross says that the company has grown customers 5x since the startup’s A round last year, and they are seeing customers get creative with how they use run books.

“The run books functionality is really the bread and butter of functionality of FireHydrant, and we’re seeing customers leverage them in ways we didn’t really imagine, and truly kind of outperforming a lot of the expectations of that functionality. So they’re getting really creative in using them to onboard people into incidents and using them for better incident communication. So that’s been a really nice thing to see,” Ross told TechCrunch.

Ross says that they are trying to position incident management as a business problem, rather than purely an engineering problem. That’s because if your site goes down for a sustained period of time, people on Twitter aren’t going to be talking about the company’s engineering failure, they are going to say the business is failing because it’s not up and running at full capacity or in some cases at all.

“Obviously I believe that site reliability in general is going to be something that has an impact on the business no matter what. If it’s something as simple as your app not working or just being glitchy, people are going to get upset,” Ross said.

The company has grown substantially since we spoke in May 2020 going from 10 employees to 54. As he continues to add new employees to the mix, Ross says that he trying to stay on top of all three aspects of diversity, equity and inclusion, but it all starts with the sources you use to hire new people. “Our philosophy is that diversity, equity and inclusion in the business starts at the top of your funnel, and we made sure to put a lot of effort into that,” he said.

As the pandemic ebbs and flows, Ross says that he has no intention of requiring folks to come into the office, and this is especially true since he has been hiring regardless of geography since the pandemic began. He has a small office in New York City, but nobody is required to go in. He is considering adding office hubs when the pandemic quiets down in Austin, Denver and San Diego.

One Concern raises $45M from SOMPO to scale its disaster resilience platform across Japan

Climate change is intensifying across the globe, and one of the most challenging cases is Japan. In addition to lying on a major fault, the archipelago is increasingly inundated from rising sea levels that make the country more prone to disasters. A decade ago, the Tohoku earthquake and tsunami dealt billions of dollars in damage, and the recovery from that tragedy remains a major international relations flashpoint.

Technology to address disasters and resilience is a key area of venture capital investment these days, and now another startup in the space is proving that there is widespread interest in this growing market.

One Concern, which builds a platform to model and simulate community resilience and response to earthquakes, floods and other natural disasters, announced this morning that it has raised $45 million from SOMPO Holdings, the venture wing of Japan’s SOMPO, one of the country’s largest insurers. The investment is part of a total $100 million, multi-year deal that will plug One Concern’s platform into the Japanese market.

Japan has been something of a gem in One Concern’s market development the past few years. The startup hired Hitoshi Akimoto as country manager for Japan in late 2019 before formally announcing that it was expanding to Japan in February 2020. In August last year, it announced a strategic partnership with SOMPO, and the insurer’s venture wing invested $15 million. Today’s deal expands that partnership further.

According to its press release, One Concern will sell its platform to six or more Japanese cities as part of the tie-up.

Previously, One Concern had raised three rounds of capital according to Crunchbase and SEC filings: a seed round in October 2015, a $33 million Series A round led by NEA in 2017, and a $37 million round also co-led by NEA. The company was founded in 2015.

StackPulse announces $28M investment to help developers manage outages

When a system outage happens, chaos can ensue as the team tries to figure out what’s happening and how to fix it. StackPulse, a new startup that wants to help developers manage these crisis situations more efficiently, emerged from stealth today with a $28 million investment.

The round actually breaks down to a previously unannounced $8 million seed investment and a new $20 million Series A. GGV led the A round, while Bessemer Venture Partners led the seed and also participated in the A. Glenn Solomon at GGV and Amit Karp at Bessemer will join the StackPulse board.

Nobody is immune to these outages. We’ve seen incidents from companies as varied as Amazon and Slack in recent months. The biggest companies like Google, Facebook and Amazon employ site reliability engineers and build customized platforms to help remediate these kinds of situations. StackPulse hopes to put this kind of capability within reach of companies, whose only defense is the on-call developers.

Company co-founder and CEO Ofer Smadari says that in the midst of a crisis with signals coming at you from Slack and PagerDuty and other sources, it’s hard to figure out what’s happening. StackPulse is designed to help sort out the details to get you back to equilibrium as quickly as possible.

First off, it helps identify the severity of the incident. Is it a false alarm or something that requires your team’s immediate attention or something that can be put off for a later maintenance cycle. If there is something going wrong that needs to be fixed right now, StackPulse can not only identify the source of the problem, but also help fix it automatically, Smadari explained.

After the incident has been resolved, it can also help with a post mortem to figure out what exactly went wrong by pulling in all of the alert communications and incident data into the platform.

As the company emerges from stealth, it has some early customers and 35 employees based in Portland, Oregon and Tel Aviv. Smadari says that he hopes to have 100 employees by the end of this year. As he builds the organization, he is thinking about how to build a diverse team for a diverse customer base. He believes that people with diverse backgrounds build a better product. He adds that diversity is a top level goal for the company, which already has an HR leader in place to help.

Glenn Solomon from GGV, who will be joining the company board, saw a strong founding team solving a big problem for companies and wanted to invest. “When they described the vision for the product they wanted to build, it made sense to us,” he said.

Customers are impatient with down time and Solomon sees developers on the front line trying to solve these issues. “Performance is more important than ever. When there is downtime, it’s damaging to companies,” he said. He believes StackPulse can help.

Vista-owned backup and recovery company Datto files to go public

When Vista Equity Partners acquired backup and disaster recovery firm Datto in 2017, it was easy to think that was the end of the company’s story. It would be comfortably absorbed into the private equity portfolio continuing to make money for the firm, but that’s not really the way Vista works. It tends to build up its companies, sometimes eventually taking them public, and yesterday that’s what happened when Datto filed its S-1.

Datto has been busy since it was acquired and reports a healthy $507 million in annual recurring revenue (ARR) along with 17,000 managed service provider (MSP) customers. Among those, it has more than 1000 customers contributing over $100,000 in ARR. MSPs are service providers that act as a company’s IT department when they don’t have internal resources.

The company has included a standard $100M placeholder for the amount they intend to raise for the event, and that will almost certainly change. In a nod to its manage service provider customer base, the company’s ticker symbol will be MSP.

When the company raised its $75 million Series B in 2015, former CEO and founder Austin McChord, said that the company was already profitable at that point, two years before Vista came knocking. “As a profitable company, Datto isn’t raising capital to fund operations, but instead, to enter new markets and build new products and technology,” he said in a statement at the time.

You can see that in the company’s financials. In the first six months of 2020, the company had subscription revenues of $234 million and a gross profit of $178 million. When sales and marketing and other costs are added in, the company had a net income of $10 million. That’s compared to $196 million in subscription revenue in the same period of 2019, a gross profit of $143 million, and a net loss of about $26 million.

In short, the company has managed to grow topline revenue, keep its cost of revenues flat, and manage the growth of its other expenses to limit their effect on the bottom line. That swung its net income per share from -$0.19 to $0.07.

Of course, companies like Datto always try to make the numbers look good in preparation for a public offering, so the real understanding will come in the next few quarters as we see if Datto can sustain its growth and keep expenses in check.

When I spoke to Alan Cline, senior managing director at Vista last year, he said his firm tends to like high performing startups like Datto that have built substantial companies.

“Software is the easiest place to innovate inside of technology. We see a huge advantage in terms of the productivity that it drives for the end business customer, and to us that high ROI is powerful because whether it’s up market or a down market, if I can prove to you you’re going to make more money or save money in your own operations by using my software, you can find the budget,” Cline told TechCrunch.

Just last year another company in the Vista portfolio, Ping Identity, filed to go public for the same $100 million placeholder, eventually offering 12.5 million shares at $15 per share. Today the company is trading at $31.68 per share with a market cap of over $2.5 billion.

Transposit scores $35M to build data-driven runbooks for faster disaster recovery

Transposit is a company built by engineers to help engineers, and one big way to help them is to get systems up and running faster when things go wrong — as they always will at some point. Transposit has come up with a way to build runbooks for faster disaster recovery, while using data to update them in an automated fashion.

Today, the company announced a $35 million Series B investment led by Altimeter Capital with participation from existing investors Sutter Hill Ventures, SignalFire and Unusual Ventures. Today’s investment brings the total raised to $50.4 million, according to the company.

Company CEO Divanny Lamas and CTO and founder Tina Huang see technology issues as less an engineering problem and more as a human problem because it’s humans who have to clean up the messes when things go wrong. Huang says forgetting the human side of things is where she thinks technology has gone astray.

“We know that the real superpower of the product is that we focus on the human and the user side of things. And as a result, we’re building an engineering culture that I think is somewhat differentiated,” Huang told TechCrunch.

Transposit is a platform that its core helps manage APIs, connections to other programs, so it starts with a basic understanding of how various underlying technologies work together inside a company. This is essential for a tool that is trying to help engineers in a moment of panic, figure out how to get back to a working state.

When it comes to disaster recovery, there are essentially two pieces: getting the systems working again, then figuring out what happened. For the first piece the company is building data-driven runbooks. By being data-driven, they aren’t static documents. Instead the underlying machine learning algorithms can look at how the engineers recovered and adjust accordingly.

Transposit diaster recovery dashboard

Image Credits: Transposit

“We realized that no one was focusing on what we realize is the root problem here, which is how do I have access to the right set of data to make it easier to reconstruct that timeline, and understand what happened? We took those two pieces together, this notion that runbooks are a critical piece of how you spread knowledge and spread process, and this other. piece, which is the data, is critical, Huang said.

Today the company has 26 employees including Huang and Lamas who Huang brought on board from Splunk last year to be CEO. The company is somewhat unique having two women running the organization, and they are trying to build a diverse workforce as they build their company to 50 people in the next 12 months.

The current make-up is 47% female engineers, and the goal is to remain diverse as they build the company, something that Lamas admits is challenging to do. “I wish I had a magic answer, or that Tina had a magic answer. The reality is that we’re just very demanding on recruiters. And we are very insistent that we have a diverse pipeline of candidates, and are constantly looking at our numbers and looking at how we’re doing,” Lamas said.

She says being diverse actually makes it easier to recruit good candidates. “People want to work at diverse companies. And so it gives us a real edge from a kind of culture perspective, and we find that we get really amazing candidates that are just tired of the status quo. They’re tired of the old way of doing things and they want to work in a company that reflects the world that they want to live in,” she said.

The company, which launched in 2016, took a few years to build the first piece, the underlying API platform. This year it added the disaster recovery piece on top of that platform, and has been running it beta since the beginning of the summer. They hope to add additional beta customers before making it generally available later this year.

OwnBackup lands $50M as backup for Salesforce ecosystem thrives

OwnBackup has made a name for itself primarily as a backup and disaster recovery system for the Salesforce ecosystem, and today the company announced a $50 million investment.

Insight Partners led the round with participation from Salesforce Ventures and Vertex Ventures. This chunk of money comes on top of a $23 million round from a year ago, and brings the total raised to over $100 million, according to the company.

It shouldn’t come as a surprise that Salesforce Ventures chipped in when the majority of the company’s backup and recovery business involves the Salesforce ecosystem, although the company will be looking to expand beyond that with the new money.

“We’ve seen such growth over the last two and a half years around the Salesforce ecosystem. and the other ISV partners like Veeva and nCino that we’ve remained focused within the Salesforce space. But with this funding, we will expand over the next 12 months into a few new ecosystems,” company CEO Sam Gutmann told TechCrunch.

In spite of the pandemic, the company continues to grow, adding 250 new customers last quarter, bringing it to over 2000 customers and 250 employees, according to Gutmann.

He says that raising the round, which closed at the beginning of May had some hairy moments as the pandemic began to take hold across the world and worsen in the U.S. For a time, he began talking to new investors in case his existing ones got cold feet. As it turned out, when the quarterly numbers came in strong, the existing ones came back and the round was oversubscribed, Gutmann said.

“Q2 frankly was a record quarter for us, adding over 250 new accounts, and we’re seeing companies start to really understand how critical this is,” he said.

The company plans to continue hiring through the pandemic, although he says it might not be quite as aggressively as they once thought. Like many companies, even though they plan to hire, they are continually assessing the market. At this point, he foresees growing the workforce by about another 50 people this year, but that’s about as far as he can look ahead right now.

Gutmann says he is working with his management team to make sure he has a diverse workforce right up to the executive level, but he says it’s challenging. “I think our lower ranks are actually quite diverse, but as you get up into the leadership team, you can see on the website unfortunately we’re not there yet,” he said.

They are instructing their recruiting teams to look for diverse candidates whether by gender or ethnicity, and employees have formed a diversity and inclusion task force with internal training, particularly for managers around interviewing techniques.

He says going remote has been difficult, and he misses seeing his employees in the office. He hopes to have at least some come back, before the end of the summer and slowly add more as we get into the fall, but that will depend on how things go.

FireHydrant lands $8M Series A for disaster management tool

When I spoke to Robert Ross, CEO and co-founder at FireHydrant last week, we had a technology adventure. First the audio wasn’t working correctly on Zoom, then Google Meet. Finally we used cell phones to complete the interview. It was like a case study in what FireHydrant is designed to do — help companies manage incidents and recover more quickly when things go wrong with their services.

Today the company announced an $8 million Series A from Menlo Ventures and Work-Bench. That brings the total raised to $9.5 million including the $1.5 million seed round we reported on last April.

In the middle of a pandemic with certain services under unheard of pressure, understanding what to do when your systems crash has become increasingly important. FireHydrant has literally developed a playbook to help companies recover faster.

These run books are digital documents that are unique to each company and include what to do to help manage the recovery process. Some of that is administrative. For example, certain people have to be notified by email, a Jira ticket has to be generated and a Slack channel opened to provide a communications conduit for the team.

While Ross says you can’t define the exact recovery process itself because each incident tends to be unique, you can set up an organized response to an incident and that can help you get to work on the recovery much more quickly. That ability to manage an incident can be a difference maker when it comes to getting your system back to a steady state.

Ross is a former site reliability engineer (SRE) himself. He has experienced the kinds of problems his company is trying to solve, and that background was something that attracted investor Matt Murphy from Menlo Ventures.

“I love his authentic perspective, as a former SRE, on the problem and how to create something that would make the SRE function and processes better for all. That value prop really resonated with us in a time when the shift to online is accelerating and remote coordination between people tasked with identifying and fixing problems is at all time high in terms of its importance. Ultimately we’re headed toward more and more automation in problem resolution and FH helps pave the way,” Murphy told TechCrunch.

It’s not easy being an early stage company in the current climate, but Ross believes his company has created something that will resonate, perhaps even more right now. As he says, every company has incidents, and how you react can define you as a company. Having tooling to help you manage that process helps give you structure at a time you need it most.