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2016 IPO Prospects: Datto Bootstrapped First, Raised Money Later

Posted on Friday, Jan 15th 2016

According to a MarketsandMarkets report, the Disaster Recovery as a Service market is estimated to grow 53% annually over the period 2015 to 2020. The market is estimated to be worth $11.92 billion in 2020. While North America will be the largest market in terms of market size, emerging markets of Latin America, Asia-Pacific, and the Middle East and Africa will be the ones with high growth rates.

Datto’s Offerings

Norwalk, Connecticut-based Datto was founded in 2007 by Rochester Institute of Technology graduate Austin McChord. Austin set up the company right after he graduated from college with a goal to provide SaaS-based backup and recovery solutions at a lower cost so that smaller organizations could benefit from the technology. The company began life in a basement with Austin building the product as he believed that he could offer a better product than what was available.

Today Datto manages more than 160 petabytes of private cloud and offers its customers a suite of software and hardware devices to help companies meet their data protection needs. Data backup and recovery solutions are offered for both on-premise and cloud-based data. It offers end-to-end recoverability and single-vendor accountability to the organizations.

Datto offers a hybrid on-premise and cloud approach to data recovery. With the combination of an on-site appliance and the cloud solution, it is able to deliver a very fast restore capability. According to the management, if a business’s email server goes down, it is able to restore the services within 6 seconds. Datto believes that since most of the SMB segment relies on on-premise infrastructure, by keeping an on-premise appliance, it is able to off-load data duplication, archival, and encryption related tasks on-site itself. The cloud replica helps with the data recovery when the physical appliances go down.

Recently, Datto got some notoriety when it was made to deal with the FBI because of the Hillary Clinton email scandal. Datto had backed up the contents of the mail server.

Datto’s Financials

Datto is a privately held company and does not disclose financials. It was bootstrapped initially and raised venture funding after it hit nearly $50 million in revenues in 2013. The company has been profitable for a while. It has raised $100 million in funding so far with investments from General Catalyst Partners in 2013 and Technology Crossover Ventures last year. Its last round of funding was held in November last year when it raised $75 million from Technology Crossover Ventures at a $1 billion valuation.

With its SME-focused hybrid approach to data recovery, Datto has made quite a presence in the US markets, and it is now looking toward international expansion. The recent round of funding will be used toward market expansion to help it enter new markets and build new products and technology. The company is looking to expand in the EMEA region. Its detailed financials are not known, but given its product focus and profitable nature, I won’t be surprised if it goes public soon. Once it does, it should also be able to sustain its valuation due to its fundamentals focus.

This segment is a part in the series : 2016 IPO Prospects

. Airbnb Sees Skyrocketing Valuations
. Actifio Looks Ready
. AppDynamics May Sustain Unicorn Valuation
. Automattic Needs to Justify Valuation
. Avant Will Have to Wait and Watch
. BuzzFeed Feeds on Native Advertising
. Coupa Manages Expenses Expertly
. Datto Bootstrapped First, Raised Money Later
. Is Uber Ready to Ride the Stock Market?
. Overfunded Domo Looks Promising
. Houzz May Unveil The Curtains
. DocuSign Looks Ready to Sign Up
. Illumio Rides On Security Trend
. Appears Ready to List
. Okta Prepares to Reveal Public Identity
. Palantir Wants to Stay Private
. Nutanix Files for IPO
. Medallia Bootstrapped First, Raised Money Later
. Slack Prepares to Communicate with the Market
. Twilio Expected to go Public Soon
. Snapchat Needs to Up Monetization ASAP
. Zscaler Sets IPO as a Long-Term Goal
. Warby Parker Should Look Before Leaping
. MuleSoft is a Unicorn, but Detailed Financials Remain Unknown
. Apttus Bootstrapped First, Raised Money Later
. Fanatics Expanding Its Playing Field
. Pinterest Finally Sees Revenues, But are they Enough?
. Tanium Bootstrapped First, Raised Money Later
. ironSource Strengthening its Revenue Generating Capabilities
. Anaplan Getting Ready to Go Public
. SecureWorks is Ready to List
. IPO-Ready Cloudera Wants to Wait and Watch
. HelloFresh Puts its IPO Plans on Hold
. Is Stripe Lining up Next?
. Qualtrics Bootstrapped First, Raised Money Later
. Skyscanner Bootstraps First from Scotland, Raises Money Later from Sequoia
. SurveyMonkey Will Likely Wait
. The Honest Company Makes the Online to Offline Model Work
. NantHealth Testing the IPO Markets, Yet Again
. BigCommerce Prepares to List
. Bloom Energy Likely to Stay Private
. Avast Software Preparing for a Listing, Yet Again
. Gusto Expands Beyond Payroll Processing
. InMobi May Have Missed the Bus
. Glassdoor Gearing up to go Public
. Human Longevity Leverages Machine Learning and Analytics to Increase Lifespan
. Blue Apron Cooking up an IPO
. Optiv Grows Inorganically
. Uber Eyeing Self-Driving
. The Trade Desk Files to List
. Deliveroo Delivers its Way to the Bank
. Selfie App Meitu Files to List on HKSE
. Apptio Files Despite Reduced Valuation and Mounting Losses
. Snap Snaps out of Chat Business to Justify Valuation
. From Bootstrapping to IPO, BlackLine Shows the Way

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