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Is Druva Ready for an IPO?

Posted on Monday, Mar 4th 2019

According to a MarketsAndMarkets report, the cloud backup market is expected to grow at a CAGR of 26.1% from $1.30 billion in 2017 to $4.13 billion by 2022. A leading player in the space is data protection solutions provider Druva that recently made its first acquisition.

Druva’s Offerings

Druva was founded in 2008 by CTO Milind Borate, CEO Jaspreet Singh, and Ramani Kothandaraman. Today, it provides an industry-leading data management-as-as service platform that unifies data protection, governance, and intelligence across enterprise data. It protects and manages over 100PB of data worldwide for over 4,000 enterprises 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, it shifted its headquarters to Sunnywale, California. In the past few years, Druva has set up subsidiaries in Japan and Germany, and has opened offices in the UK, Australia, and Singapore. It has also set up cloud data center offerings in Canada, the UK, and Hong Kong that would satisfy national and regional data protection requirements. About 72% of its customers are in the Americas, while the rest are spread across Europe and Asia.

Druva last year acquired Letterkenny, Ireland-based CloudRanger, which streamlines backups, disaster recovery, and server control for AWS Cloud. CloudRanger was integrated into the Druva Cloud Platform within 60 days. Both CloudRanger and Druva employ a cloud-native architecture that enables immediate integration and enhancements. CloudRanger has raised a total of $1.1 million in funding and had an estimated annual revenue of $2 million. The terms of the deal were not disclosed.

Druva’s Cloud Platform is comprehensive and contains architected and patented global data deduplication capabilities. Druva can have a single global dedupe index, whereas most classic data protection systems have low elasticity and require additional hardware once they reach 100 terabytes on the dedupe index. Druva’s services, which employ a multi-tenant, stateless node architecture with fully elastic storage for both data and metadata, can scale into hundreds of petabytes. Druva has also built an extensive security model, employing a security-by-design approach, which has made the company one of the few HIPAA- and FedRAMP-audited organizations in the cloud.

Other 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. 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.

Druva’s Financials

Druva doesn’t provide detailed financials but it disclosed in September last year that it is growing at 60% and is on track to reach recurring revenue of $100 million at the end of the fiscal year.

Its 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.

In 2016, it achieved 300% growth in Phoenix revenue and overall revenue grew at 70%-80%. Based on 70%-80% growth rate, we estimated 2016 revenue of $85-$90 million and forecast 2017 revenue of $144-$157 million. Based on the recently disclosed 60% growth rate for 2018, we estimate revenue of $234-$251 million for 2018.

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. It has raised $198 million so far with investments from Tenaya Capital, NTT Finance, Nexus Venture Partners, Sequoia Capital, EMC Ventures, Riverwood Capital, Hercules Capital, 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. It last raised $80 million in August 2017 at an estimated valuation of $500-$600 million.

In July last year, Druva also strengthened its senior leadership team with the appointment of Thorsten Freitag as Chief Revenue Officer and Sherry Lowe as Chief Marketing Officer. It now looks ready for an IPO.

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