Boston finally has a new unicorn after a nearly three-month dry spell for companies crossing the $1 billion valuation mark.
Wasabi Technologies Inc. has become Boston's latest unicorn after raising $125 million in a Series D round led by L2 Point Management. The Boston-based company also announced the expansion of its debt facility with MGG Investment Group by $125 million. Wasabi said the $250 million in new funding puts its valuation over $1.1 billion.
Wasabi is the seventh company founded by CEO David Friend, a serial entrepreneur who was most recently the CEO of Carbonite Inc. Friend launched Wasabi in 2017 alongside technical co-founder Jeff Flowers. He said the company’s cloud storage system is less expensive and faster than Amazon Web Services.
Read more: What is a unicorn company? How many are there in Massachusetts?
“If you look forward 10 years, almost everybody believes that the world’s data is going to be in the cloud,” Friend said in an interview. “And so, I said this is a once-in-a-generation opportunity where a whole industry is going to shift. And while that shift is going on, we can capture a lot of it by just being laser focused on being the world’s best cloud storage vendor.”
Friend said his goal has been to scale Wasabi as quickly as possible. The company said it has more than 40,000 customers in over 100 countries and that revenue more than doubled from 2020 to 2021. Wasabi has 13 data centers around the world, Friend said, and they aim to add another 8 to 10 next year. Wasabi has over 250 employees. Last April the company employed 125 people.
“I want to keep my foot on the accelerator,” Friend said.
This new funding will help fuel Wasabi’s global expansion. Friend said the debt funding will go toward building the physical data centers and purchasing things like disk drives, servers, racks and electricity. The equity will help the company build out the teams to sell its product in its new locations.
Friend said some of these new locations will be in new countries and some will be within existing markets. Wasabi is expanding to new locations because many countries outside the U.S. have strict data sovereignty laws, Friend said, meaning that companies cannot store their data outside the country in which they’re located.
“If we want to keep the growth going and we want to keep building that brand, we need to invest in marketing. We need to invest in sales. We need to invest in data center facilities,” Friend said.
Using marketing tactics to increase Wasabi’s visibility has also been a big priority for the startup. Wasabi promotes its role as the official cloud storage partner of Liverpool FC and announced a multi-year sponsorship deal with Fenway Sports Group earlier this year. Friend said they’re taking a play from tech giants like Dell and advertising at baseball games.
“If this wasn’t working for these guys, they wouldn’t keep doing it year after year after year,” Friend said. “So, I said let’s try it and see if it works. And it makes us look bigger than we are, which is again part of that brand building.”
Friend also expects becoming a unicorn to raise Wasabi’s profile in the marketplace.
“There’s still a lot of big companies that don’t want to do business with a startup,” he said.
Friend said he understood the concerns about some previous data storage companies going out of business and losing people’s data in the process. But, he said, Wasabi is proving that it has credibility and the ability to meet the world’s ever-growing data storage needs.
“(We’ve) got proven technology, a proven go-to-market strategy. And investors are willing to pay up for this because they can see that this company is just going to keep going, going, going. There’s nothing really standing in the way of this company getting to be a multi-billion dollar company,” Friend said. He added that people are only going to need more cloud storage in the future, not less.
Wasabi is one of a few companies to become a unicorn this year. The last startup was VulcanForms, a Burlington-based additive manufacturing company, which raised new funding in early July.
Beyond hitting unicorn status, Friend sees going public as the next step to build trust in Wasabi.
“I remember at Carbonite we used to get, ‘Who the heck is Carbonite and why should we trust you with our data?’ And we hear that at Wasabi too. Once (Carbonite) went public, we stopped hearing that. People just kind of consider you part of the IT landscape. You’re another big, trusted vendor out there,” Friend said.
