WEKA, the developer of high-performance, parallel filesystem software, has taken in a second funding round this year, saying it’s needed to fuel sales growth and global expansion.
The company was started in Israel in 2013 to develop its scale-out Matrix file system. This runs on commodity x86 hardware and in AWS, Azure, GCP, and Oracle clouds. It has notched up SPC and STAC benchmark wins that set it apart from competing fast-access parallel filesystem products such as Spectrum Scale and Lustre, and scale-out file systems such as Dell EMC’s Isilon/PowerScale and Qumulo. Matrix is used in high-performance computing, analytics, AI and machine learning, life sciences, finance, and engineering.
Liran Zvibel, co-founder and CEO, said of the funding round: “This funding round represents a tremendous milestone … and we are grateful to our new and existing investors for their support. The new capital will allow us to invest in our product and go to market, maintain hypergrowth, and gives us the runway we need to become a profitable, independent company.”
It raised $135 million, having already raked in $73 million in January, taking its total raised to $275 million and lifting its valuation to $750 million.
- 2014 – $10 million A-round
- 2016 – $22.5 million B-round
- 2019 – $31.7 million C-round
- 2022 – $73 million C2-round
- 2022 – $135 million D-round
In September, privately-owned WEKA claimed it was surpassing internal business projections with a record third quarter that exceeded its entire fiscal 2021, boasting:
- 255 percent net dollar retention (NDR) while maintaining a zero-churn business
- 250 percent attainment against its Q3 financial plan
- 635 percent total contract value (TCV) growth
- 232 percent annualized run rate (ARR) growth
- Significant expansion into the Asia Pacific region and beyond
The Matrix filesystem has evolved into the WEKA Data Platform and the cash will be used to expand its features and cloud integrations, support new use cases, and accelerate further development. WEKA said this funding will enable the company to reach profitability, fuel significant global expansion, and rapidly scale its cloud, sales and marketing operations and human resources teams.
The global economic situation is threatening to turn into a full-scale recession. Several tech startups have run out of money because fundraising in this climate is challenging. Competitor Qumulo laid off around 80 people in June and Pavilion Data closed down in October.
Yet stronger players have scored big funding wins, such as analytics supplier Imply with $100 million in May, SaaS backup vendor HYCU’s $53 million in June, and Lightbits, Scale Computing, and Pliops, which raised $100 million in August. Now WEKA has joined their ranks.
The latest round was led by Generation Investment Management. New and existing investors also contributed including 10D, Atreides Management, Celesta Capital, Gemini Ventures, Hewlett Packard Enterprise, Hitachi Ventures, Key1 Capital, Lumir Ventures, Micron Ventures, Mirae Asset Capital, MoreTech Ventures, Norwest Venture Partners, NVIDIA, Qualcomm Ventures, and Samsung Catalyst Fund.
We asked WEKA some questions about the latest round.
Blocks & Files: Having raised $74 million in January, why does WEKA need another $135 million now?
WEKA: As we shared in our recent Q3 momentum announcement in September, WEKA is seeing significant success and customer demand around GPU-accelerated projects on-premises and in the cloud.
We are investing heavily in enhancing the WEKA platform, expanding its applicable use cases, and expanding our global footprint and go-to-market. The new capital will enable us to continue doing this at scale. It will also allow us to reach profitability and become an independent company, which we endeavor to achieve in the next 12-18 months.
Blocks & Files: Is WEKA in danger of becoming over-capitalized, restricting its IPO opportunity and preventing an acquisition?
WEKA: No, WEKA is not approaching over-capitalization. We have taken great care to maintain healthy funding levels to fuel growth without over-leveraging the company. Given current market conditions, we will not be rushing to pursue an IPO anytime soon.
We have a large ecosystem of go-to-market partners and enterprise customers. We can better serve them as a profitable, independent company.
Blocks & Files: Will raising more money improve WEKA’s standing with customers, helping it to grow sales faster?
WEKA: Absolutely. The new capital will enable us to invest ahead of the growth and provide the runway we need to become profitable. This is an important consideration for our major enterprise customers, several of whom are Fortune 100 companies that rely on WEKA to support their cloud and AI initiatives. They want to ensure they are partnering with a company that will be around for the long haul, so their future tech stack is secure.
Blocks & Files: Is WEKA planning to make an acquisition with the new cash?
WEKA: We have no immediate plan to make an acquisition.