Sramana: How big is endpoint backup and recovery in the commercial space?
Jaspreet Singh: It is a $650 million market, according Gartner. It is growing 10% year on year. The largest shareholder is HP, which has $250 million in revenue, but their product is 13 years old and has declining revenue. The market was ripe for disruption when we entered it. We have been disrupting it ever since.
Sramana: When you first launched, the company endpoint backup was not your primary focus, but you detected a gap in the market and pivoted the company into that solution and re-branded it as Druva. Is that correct?
Jaspreet Singh: Yes. We did not understand market size or the competitive analysis. We just knew that there were a lot of people leaving PCs and going towards mobile devices. The software they were using was designed for the PC era when you could have continuous backup of data. We wanted strong differentiators so we could have strong premiums. Today Druva is twice the cost as the number two player in the market and four times more expensive than Symantec, but we still sell like hotcakes. We are ranked number one by Gartner in the entire category. We have some large blue chip customers.
Sramana: In the 2007 and 2008, when you started to bring this product to market, how did you get the company going? How did you finance the early product development?
Jaspreet Singh: In 2008 we started building the endpoint product and did not start selling until 2009. Initially we started out as a bootstrapped company before we realized that a product had a bit of growing to do. In late 2008 we took angel funding, and we underestimated the amount of money that we needed. We went through that money in five months.
To our surprise, the market had a real demand for the product. In the early summer of 2009 we had a customer from the UK who cut us a check for $100,000. That almost equaled our angel investment and fueled more growth. Later on that summer we had four major financial companies sign on as customers. We quickly ramped our revenue and in 2010 Sequoia noticed us and funded us. We essentially had a small amount of angel funding and then bootstrapped the company from there.
Sramana: You were raising money as a completely validated company. That is a key point.
Jaspreet Singh: That is exactly it. I raised money when I was already a validated company.
Sramana: In India that is the way to raise money, and it is becoming that way in Silicon Valley. Today venture capitalist expect you to bootstrap your way to a Series A.
Jaspreet Singh: In a way it sort of makes sense. Building a startup is cheap. The enterprise category is a bit more expensive because you have to bring a good product to market. Enterprise clients want to make sure you are going to be around.