Actifio raises $100 million, valuing company at $1 billion

Actifio founder and chief executive Ash Ashutosh (courtesy of company)
Actifio founder and chief executive Ash Ashutosh (courtesy of company)

Data storage technology firm Actifio has raised $100 million in new funding, one of the largest investment deals for a privately held Boston tech firm in recent years.

The round valued the Waltham company at $1.1 billion, higher than a number of publicly traded tech firms in the Boston area, including Brightcove (BCOV), Constant Contact (CTCT), and (CRCM).*

In fact, Boston rarely has had a venture capital-funded tech firm achieve a billion-dollar valuation prior to going public. Out of the 20 venture-backed US firms that sported billion-dollar valuations in 2012, just one had a major presence in Boston at the time (Kayak). And today, Actifio is one of two companies in the Boston area with a billion-dollar valuation — out of 31 total in the US — with the other being e-commerce site Wayfair.**

Actifio founder and chief executive Ash Ashutosh said the company raised the funding to accelerate its growth, particularly its global expansion, and to help potential customers feel assured about the viability of the company. Some companies have been looking at spending several million dollars with Actifio over the course of several years, he said.

“We decided we wanted to solve the viability issue and also to double down on investing,” Ashutosh said. “So either we could go public, but we’re not quite ready for that one yet — plus there’s really no need without much competition — or we could raise $100 million at a $1 billion valuation.”

Actifio had interest from investors that could’ve enabled the company to raise even more funding, “but at some point you stop,” he said.

See related post: Boston’s next 12 tech IPOs?

Cutting IT costs

Actifio’s technology works to reduce a company’s data management costs by as much as 90 percent, by dramatically reducing the number of copies of data they need to make. The system works by virtualizing the data, decoupling it from the physical storage.

While the promise of cost savings opens the door for Actifio to speak with companies, “what people get delighted about is the speed with which they can access information,” Ashutosh said.

A process for accessing data that used to involve numerous steps and take weeks “is now taking a minute and a half” with Actifio, he said. “You dial the knob back a month and instantly have the data — it’s like a time machine.”

Actifio reports it now has more than 300 customers, among them Sanofi, Unilever, HBO, and Netflix. The average deal size with Actifio last quarter was $388,000, Ashutosh said, and total revenue for 2014 was “well over” $40 million (a specific figure isn’t being disclosed).

Actifio is targeting its initial public offering of stock for some time from mid to late 2015, Ashutosh said.

“Ash has assembled a tremendous team that I think has the ability to build a big company here in New England,” said Bob Hower, partner at company investor Advanced Technology Ventures, in an interview.

Funding details

The new funding round was led by Tiger Global Management, a New York investment firm that previously backed Facebook and Linkedin when the companies were still private.

Advanced Technology Ventures also took part in the round, as did other returning investors including Andreessen Horowitz, North Bridge, Greylock, and Technology Crossover Ventures.

A news release on the funding includes a quote from Marc Andreessen: “Actifio’s copy data virtualization makes data available when and where you need it, just as server virtualization did for compute in the current generation of data centers. In the data center of the future, that’s going to be a very big deal.”

Actifio said it closed $75 million of the funding on March 14, and the rest is committed to the company by April 7.

Actifio has now raised a total of $207 million since its founding in 2009, making it the second best-funded private tech firm in the Boston area, behind Wayfair. (That company has raised the only $100 million rounds in Boston tech in recent years, with $165 million raised in 2011 and $157 million closed this month.)

A year ago, Actifio had raised $50 million in a Series D round that valued the company at $500 million.

Actifio now employs 280, with about 120 of those in Massachusetts, and expects to end the year with 350 employees in total, Ashutosh said.

* Update: Actifio initially reported its valuation was $1 billion following the new funding. The company now says the final valuation number is $1.1 billion.

** Update #2: The original version of the post didn’t include this sentence. The details come via the Wall Street Journal’s list of startups with billion-dollar valuations.

Kyle Alspach has worked in journalism in Massachusetts since 2005 and was one of the original staff writers at BetaBoston.
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