Wasabi CEO plots global expansion for its cloud storage

Wasabi, a cloud storage company, has secured a total of $137 million in Series C funding, bolstered late last week by $25 million in additional money from Prosperity7 Ventures and Western Digital Capital.

Wasabi previously raised $8.2 million in Series A funding in 2017 and then $68 million with its Series B in 2018. Wasabi claims to have a total equity financing at $244 million. The company, as part of this announcement, said it's now serving 23,000 customers. The company also claims to have 5,000 members in its managed service provider and value-added reseller partner network. Wasabi also states its storage has interoperability with 350 other products, including Veeam and Rubrik.

Calling itself a "hot cloud storage company," Wasabi offers cloud object storage at the personal tier for $5.99 per TB, per month with no egress fees with their "pay-as-you-go" pricing. Reserved capacity for larger, enterprise operations are available in one-, three- or five-year contracts. Sample prices at these tiers provided by Wasabi include $38,456 for storing 100 TB for five years or 240 TB for five years at $94,294.

Wasabi says its lower prices come from buying directly from HDD manufacturers. The company also claims its software can control HDD read and write speeds more effectively than traditional operating systems.

Wasabi frequently compares its prices against the large U.S. cloud companies like Amazon and Microsoft as well as hybrid cloud companies which also offer on-premises storage, such as NetApp or Cloudian.

In this Q&A, Wasabi CEO David Friend discusses how the company plans to use this most recent funding round to expand Wasabi, increase its worldwide presence and shake the startup label.

With the Series C funding complete, what are some next steps for Wasabi?

David Friend

David Friend: The most exciting thing about this financing, in addition to the fact we raised a ton of money and had to turn a lot away on top of it, is the type of investor we got.

We've gotten to where we are today without going to any venture capital firms. We've gone directly from family offices and wealthy individuals to now Fidelity.

From the customer's standpoint, this signals the end of Wasabi's startup phase. This is serious money from serious investors. During the first few years of the company's life, we would meet with enterprise customers and they would be like, 'How do we know you guys are going to be here in a couple of years?'

So, I said when we started the company, based on my experience at Carbonite and other, previous companies, we'd take four to five years where people forget about the fact you're a startup and start looking at you as an established player in the industry.

Your announcement indicated this money would 'fuel data center' expansion. What are some markets you're considering?

Friend: Right now, we're in Japan, we're in the EU, and we're in the U.S. There's two reasons to build more data centers beyond adding capacity, which we're always doing. [Wasabi uses colocation providers.]

One is this business of data sovereignty. We've got prospects in places like Korea, Australia, Singapore, U.K., Brazil, Mexico, Canada. They say, 'Bring Wasabi to Canada. We've got all this healthcare data. We'd love to store it in Wasabi because it's costing us a fortune to store it on Amazon.' But you've got to have a data center in Canada because they're not allowed to ship that data to the U.S. for storage.

If you've got anything relating to customer data, healthcare data, government data, even things like school grades… If we want to be the big cloud storage vendor in Korea, we've got to put a data storage center in Korea.

Now, with the U.K. breaking off from the European Union, we're building a data center in the U.K. We used to get a lot of data from the U.K. [and] store it in Amsterdam. Now we can't do that anymore.

The other reason for building the data centers is to get closer to the customers personally. We also need to be closer to the customers for reasons of latency.

Why is brand investment important for Wasabi at this point?

Friend: I've always been a big believer in building a brand because money that you spend on building your brand is money in the bank. Nobody can take your brand away from you.

We take that $250 million dollars that we raised and we spend 100% of it on one product -- cloud storage.

There's a lot of brands I admire in the IT industry and a lot more that I think are terrible, where people just don't get the marketing. There are a lot of engineering geeks. They don't know how to come up with a company that anyone can sell. Some of the stuff I see is horrendous. It's about getting the name out there associated with what we stand for. That's what we're constantly trying to build. Amazon may have all the resources in the world, but guess what, they have over 200 different cloud products beyond storage.

I don't care how big you are; you can't be the best at everything. We take that $250 million dollars that we raised and we spend 100% of it on one product -- cloud storage.

After this many funding rounds, is Wasabi planning to go public in the future?

It's TBD, but I certainly wouldn't have any objection to doing it. The cloud market is so huge, we're developing a machine, essentially, where I can take a dollar, stick it in the top, turn the crank, and three to four dollars of value will come out the bottom.

I don't know what the state of the public markets will be then, but the choices will be: go back to the private markets, go public or do a special-purpose acquisition company or whatever. We'll evaluate at that time. Traditionally the public markets give you the best access to capital at the best valuation. If that happens to be the situation in a year, or two, or three from now, that's probably where we'll go.

I think a year from now we'll be doing the same thing we're doing now, but a lot more of it.