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India’s First SaaS Product Unicorn: Druva Executes Steadily

Posted on Wednesday, May 24th 2017

Data protection solutions provider Druva was born in Pune but moved to Silicon Valley to create a global product company. It has been executing solidly and quietly without too much hype. 

Druva’s Journey

Druva was founded in 2008 by CTO Milind Borate, CEO Jaspreet Singh, and Ramani Kothandaraman to cater to the disaster recovery market. They wanted to innovate within the space of compliance, risk mitigation, and disaster recovery of mission-critical data. They built a product geared toward this, but while trying to sell their product, Jaspreet realized that another market opportunity lay in the area of risk mitigation for endpoints. They then pivoted to create an endpoint backup product, the first version of which was released in 2009.

Back then, as increasing number of employees migrated to mobile devices, endpoint backup was becoming important. Organizations needed to not only protect on-premise data, but also when their employees were traveling. Products available back then were mostly focused on anti-virus and leakage protection and hardly any one focused on endpoint backup.

Today, Druva is one of the fastest growing edge data protection providers. They offer an easy-to-use, single dashboard that lets organizations manage backup, availability, and governance. Their product is installed in over 4 million devices across 4,000 organizations worldwide including NASA, Pfizer, hospitality giant Marriot, NBC Universal, Dell, Hitachi, ServiceNow, Stanford University, Continental, Emerson, Flex, Fujitsu, and defense equipment maker Lockheed Martin.

Druva was founded in Pune, but after it gained traction and received funding from Sequoia Capital, it shifted its headquarters to Sunnywale, California. With the move, it has chosen to look and feel more like a regular Silicon Valley company, underplaying its Indian roots. This is very different from the strategy that Freshdesk has followed. Freshdesk has claimed the role of the flag bearer of Indian startups in a way that Druva has not done.

In the past two years, Druva has set up subsidiaries in Japan and Germany, and has opened offices in the UK, Australia, and Singapore. It has recently set up new cloud data center offerings in Canada, the UK, and Hong Kong that would satisfy national and regional data protection requirements. About 65% of its enterprise customers are in the Americas, 25% in Europe and the Middle East, and 10% in the Asia Pacific region.

It has about 400 employees with over 100 of them in research and development in the Pune and Sunnywale offices. It is an IP-heavy business. In 2014, it received two patents for its distributed scalable de-duplicated data backup system. In 2015, it received the patent for Pre-Population of Data for Replication of Data Backups. It now files for three to four patents every year.

Their core products include the endpoint backup platform InSync and remote server backup product Phoenix.

InSync uses a single dashboard for backup, availability, and governance of endpoint data. Organizations are able to ensure mobile data backup, data loss prevention, and data governance along with file sharing and access capabilities. It offers Enterprise, Elite, and Elite Plus plans for cloud-based solutions and also offers an on-premise private cloud plan.

The remote server backup product Phoenix is a cloud-based backup service that lets organizations store data indefinitely with limitless snapshots and flexible retention policies, while ensuring lower backup costs. It offers Business, Enterprise, and Elite plans for this product.

In December 2016, Druva unveiled Druva Cloud Platform to accelerate the full enterprise cloud-first ecosystem. Its open architecture and APIs enable businesses and partners to extract greater value from stored data for solving information management challenges, including compliance, retention, legal, and analytics across disparate sources. With over 20 ecosystem partners, IT is better equipped to mitigate business risk, embrace the efficiencies of cloud, and create a more agile, and efficient data management environment.

Druva’s Financials

Druva does not disclose detailed financials, but revenues had crossed $15 million in 2013. In 2015, it recorded five consecutive years of 100% growth and at a June 2015 1M/1M Roundtable, Jaspreet mentioned that the company was operating at revenues between $10 million and $50 million. In an earlier roundtable in October 2014, Naren Gupta of Nexus Venture Partners mentioned that they’re doing $10 million a quarter. So, extrapolating from these two conversations, Druva should have been at over $50 million annual revenue in 2015.

Revenue is currently growing at 70%-80% y-o-y. It recently announced that it has achieved 300% growth in Phoenix revenue. The US, the UK and Germany contribute 90% of its total revenue. Profitability still eludes Druva like most SaaS companies. But CEO Jaspreet expects the company to break even in 2017. Based on 70%-80% growth rate, we estimate 2016 revenue of $85-$90 million and forecast 2017 revenue of $144-$157 million. 

Druva was bootstrapped initially, and after proving its product and capabilities, it received its first institutional funding of $5 million from Sequoia Capital India and Indian Angel Network in 2010. After this funding, Jaspreet moved to the US to shift the corporate headquarters, a logical move necessitated by the heavy enterprise focus on the company. Its Series B round for $12 million in August 2011 was led by Nexus Venture Partners. Series C and D rounds were for $25 million each in 2013 and 2014. It has raised $118 million so far with investments from Tenaya Capital, NTT Finance, Nexus Venture Partners, Sequoia Capital, EMC Ventures, and Indian Angel Network. It raised $25 million in August 2014 at a valuation of INR 14 billion (~$220 million).

In September 2016, it raised $51 million at an undisclosed valuation in a round led by Sequoia India and joined by new backers including Blue Cloud Ventures, Hercules Capital, and EDBI, the investing arm of the Singapore Economic Development Board. Other existing investors in the round include NTT Finance, Nexus Venture Partners, and Tenaya Capital.

By the end of 2017, if Druva achieves its revenue targets, it will decide the timing of its IPO and the latest fundraising is expected to be its last round. Druva’s growth pattern has been disciplined and understated. Its focus on fundamentals makes it one of India’s most credible software product ventures that has made a clean transition into a global company.

There are many possible exit paths through acquisitions including Cisco, HPE, Dell-EMC, Hitachi, and NetApp.

A profitable, high growth ~$150 million revenue company should be able to comfortably debut in the public market at a billion dollar plus valuation in 2018, making Druva India’s first legitimate SaaS product Unicorn.

More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.

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