VAST Data valued at $3.7bn after $83m cash round

VAST Data has had a fourth funding round, raising $83m to hit a valuation of $3.7bn, a year after raising $100m at a $1.2bn valuation.

It doesn’t strictly need the cash, with $230m unspent capital on its balance sheet.

The round was led by new investor Tiger Global Management and featured strong participation from Nvidia and several other existing investors. Total funding is now $283m and VAST says it can focus on growth and serving its customers indefinitely, without worrying about raising more money.

Renen Hallak

Renen Hallak, VAST’s founder and CEO, said: “We are humbled by today’s validation from Tiger and Nvidia. It is evidence of our accomplishments to date and serves as a launchpad for the opportunity ahead of us.”

VAST claims it is the next great independent infrastructure company and poised to disrupt and transform cloud and AI data centres globally.  It was founded in 2016 and developed an all QLC-flash Universal Storage file+object array offering NVMe SSD speed, helped by Optane metadata storage, with petabyte capacity levels and economics. It exited the hardware business and moved to a Gemini subscription business model in April.

A post by CMO and founder Jeff Denworth said the latest funding establishes “VAST as one of the world’s most valuable startups and propelling VAST into an elite category of technology companies that also includes breakout successes such as Databricks, Snowflake and UIPath (all of whom are also Tiger portfolio companies).”

It launched its first product in 2019 and ended its second fiscal year with nearly 100 customers and a near-$100m run rate of annualised software revenues, quadruple that of 2020. It was also cash flow-positive. So why does it need the money?

Denworth says: “Today’s announcement is intended to raise visibility to our mission and to elevate our profile in the hearts and minds of the strategic customer prospects who are looking to make massive bets on our technology in the years to come. At $3.7bn, we’re now worth more than many of the household name brand storage and cloud infrastructure products that VAST competes with.”

Regarding the unspent $230m, we have “no plans to draw down on this cash while we continue hyper-growth.” That growth is based on netting high-spending customers, who (the firm hopes) then go on to spend even more.

VCs like those numbers and appear to have gone in for the kill.

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