‘The timing was right because the IPO market has obviously been slower for a lot of tech companies. It also helps us build some brand cachet when companies like Vista, KKR, and TCV are backing us as a growth-stage company. Sometimes customers or channel partners want to know that there’s people behind you. And that did it for us,’ says Nasuni President David Grant.

Looking For Room To Grow

Nasuni, which develops technology that consolidates and protects data from multiple sources, has had a great run since its founding 15 years ago. In the last few years, it has been growing its annual recurring revenue by about 30 percent annually, and is cashflow positive.

So when Vista Equity Partners, joined by Technology Crossover Ventures and KKR, made a majority investment of an unspecified amount in Nasuni, it wasn’t because the company needed the money (the new funding round values Nasuni at approximately $1.2 billion).

Indeed, David Grant, president of the Boston-based company, told CRN outright that it didn’t. Nasuni, he said, was cashflow positive, and built for profitability rather than to grow quickly.

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“We actually did this financing more for Vista’s track record and how they can help us scale from here,” he said. “I think they have over 85 portfolio companies, over $100 billion managed, they’ve worked with some of the best brands. So when we met the team, there was a good relationship there. We felt they could help us scale.”

Growth is a big priority for Nasuni. The company, Grant said, is exploring the potential of the federal market, and is looking to add more data services that can take advantage of a business’ data once it is consolidated using Nasuni’s technology.

Nasuni technology also helps businesses get their data ready for AI, Grant said. “[A] beautiful thing that happens when you consolidate with Nasuni is that the permissions follow it,” he said. “So when I’m using AI services against that data, I will only be allowed to use the files that I have access to. One of the things that people are worried about when it comes to AI is, if I just open it up to all my data, will it be able to pull sensitive information out, especially in the enterprise. We’re enabling AI-ready infrastructure.”

Here’s more of CRN’s interview with Grant, which has been lightly edited.

How do you describe Nasuni?

Nasuni is a data management company that delivers cloud data services. Essentially we replace what legacy network-attached storage was doing with on-prem hardware in the cloud. Think about an orchestration layer across object storage. So. Microsoft object storage, Google object storage, or AWS object storage. We orchestrate and consolidate and protect all the file data of a large enterprise. That’s what we do.

Nasuni has been around for quite a while …

The company was actually founded 15 years ago. The first couple of years was figuring out the product, and then a couple of years of finding product market fit. But I’d like to think that due to the cloud adoption of infrastructure as of service, really, it’s about a seven- or eight-year-old company when it comes to real market traction. I’ve been on board for five years now.

The founder, Andres Rodriguez, had come from one of the first object store vendors, Archivas, that they sold to Hitachi. And he built this to solve some pretty critical issues. The problem is nobody was moving their critical infrastructure to the cloud at that point, especially large enterprises. So we’ve evolved as that market has evolved. As that market has grown, we’ve grown with it. That’s why I say it’s really a seven-year-old company.

What kind of financial numbers can you share?

Well, we announced in January of last year that we hit $100 million in ARR (annual recurring revenue), so that’s public information. I’m going to share that with you. And then we’ve been growing 30 percent annually every year since, so you can do the math. We’re not disclosing numbers today yet. But the math is pretty good. We’re also cashflow positive. We from the beginning didn’t get caught up in over-investing and building too fast. We were responsible with the way we built the company. And because of that, we’re cashflow positive and in a pretty good situation.

Many companies that have not yet gone public quite often say there is a disadvantage to being cashflow positive. What do you see?

That was definitely a big thing up until about a year ago, growth at all costs. As you’ve probably seen, that model has hit the brakes a little bit as people are looking for more traditional business models and responsible business models. There’s always a balance of how much you can grow in a market, and then how much you can deliver cash back to the shareholders and business. We tried to straddle that as well as we could.

So Nasuni has received new investment but was not acquired. Talk about the investment.

By the way, just so you know, we’ve been a 100 percent channel company since the beginning. We still are, so we have a massive number of partners both in Europe and in the U.S.

No, it’s not an acquisition. It’s a majority investment led by Vista, a very reputable top-tier investment company. KKR and TCV or Technology Crossover Ventures, joined in as well to take over a majority position of the company. So it’s not a total acquisition, but a majority-led investment.

Why would they do that?

I think the timing is right for this market. I think that, coupled with the strong business that we’ve built. We have a great culture, a great team. But we’ve also shown consistent growth pretty much over our history. In the last five to six years, we’ve been a consistent 30-percent growth company CAGR (cumulative annual growth rate). We also have strong business fundamentals. And we deliver great service to our customers. If you look at our NPS (net promoter score) or CSAT (customer satisfaction) scores, we get really high reviews. We won the NorthFace ScoreBoard award. If you look at the Gartner Peer Reviews or G2, we’re 4.8 or 4.9 out of 5.0. Our customers are really happy. We have customers like Autodesk, Boston Scientific, Johns Hopkins University, Patagonia, Mattel, William Sonoma all relying on Nasuni to manage their critical file data.

And I think the timing is right. This is a massive market. The network-attached storage market is somewhere around a $20 billion market and growing quickly because of AI. AI is creating tons of data. And you need to centralize that data. And that’s what the cloud allows you to do. Legacy storage is a silo-based approach that doesn’t it. So I think it’s a combination of market timing as well as the traction we’ve had as a company.

Did you need the money?

We had a cash balance, and we were cashflow positive. We did not need the money at all. We actually did this financing more for Vista’s track record and how they can help us scale from here. I think they have over 85 portfolio companies, over $100 billion managed, they’ve worked with some of the best brands. So when we met the team, there was a good relationship there. We felt they could help us scale. And the timing was right because the IPO market has obviously been slower for a lot of tech companies. It also helps us build some brand cachet when companies like Vista, KKR, and TCV are backing us as a growth-stage company. Sometimes customers or channel partners want to know that there’s people behind you. And that did it for us.

Any plans in the next year or two for an IPO?

No. We’re creating a business that we believe can be an IPO-able business, for sure. We believe this space is large enough. We believe we have something very unique and disruptive. But there’s no definitive plans for the next 12 to 24 months. We’re just gonna continue to run the growth plan that we run and grow 30 percent and see where it takes us.

Did you say ‘IPO-able?’

Don’t use that word. I’m a recovering CMO (chief marketing officer). It won’t be good if you use that. But yes.

[For an IPO] you need a big market, which we have. The network-attached storage market is a massive market. The data storage market is a massive market. And so you need that market, and you need a good business model. And we believe that market is ripe for disruption. It hasn’t actually changed much in 25 years. It’s very rigid, and it’s ripe for disruption.

What are your strategic priorities for the rest of 2024?

So we definitely can still grow globally. Right now we have a presence in the U.K., Germany, and France. We haven’t done AsiaPac at all, or Southern Europe. So we definitely are looking at those markets. There are some vertical markets that we could pursue more, such as the federal market, for example. We’ve been mainly a public cloud offering, but our technology also works for private clouds, but it just hasn’t been an area of focus for us. So the Federal market is definitely something we’re looking at this year for areas of growth.

We consolidate companies’ data into one global namespace in the cloud, and we protect it. Now we want to start thinking about whether we can deliver more data services on top of it. One of the things we recently released was the Nasuni IQ which gives people information about their data. We want to do more there. So more data services on top of the data. They’re the main areas we see growth in the next 12 to 24 months.

How does Nasuni use AI in either its product development or in bringing the technology through partners to customers?

When you think about storage and about unstructured data storage or network-attached storage file data, it currently sits across many silos. We consolidate that data and make it ready for AI for Microsoft, AWS, or Google services. The other beautiful thing that happens when you consolidate with Nasuni is that the permissions follow it. So when I’m using AI services against that data, I will only be allowed to use the files that I have access to. One of the things that people are worried about when it comes to AI is, if I just open it up to all my data, will it be able to pull sensitive information out, especially in the enterprise. We’re enabling AI-ready infrastructure. So consolidate the data, permission the data, and then open it up. We have an API feature that then allows companies to use things like Azure Search, AI search, or products from Google and AWS as well to use those AI services against.