Since we led the Series B financing in VAST Data in Feb-2019, the company has conducted two additional financing rounds at significant valuation uplifts, most recently an $83m round at a $3.7bn valuation led by Tiger Global, and we have nonetheless invested to increase our ownership in the company since our original investment.
by Avery E. Schwartz - Partner
We wanted to take the opportunity of this latest round to share why we were so excited to join forces with founder & CEO Renen Hallak and his world-class team during our original investment two-plus years ago, and why we believe the company they are building still has a long way to run to achieve its vision.
Quantum Leap Company
In software, there seems to be a ‘10x rule’, that unless you are creating something that is 10x better than the in cumbent offering, don’t bother; disruption needs to conquer inertia as well, often a more formidable force than a competitive technology/product.
However, in rare instances, a company creates significant disruption across a number of vectors, and accesses the ability to add massive value in a big market, earning commensurate compensation for this value that can result in a sizable business. Apple’s iPhone is the most notable of these instances that comes to mind, a true leapfrog consumer product.
A confluence of early signals led us to believe in early 2019 that VAST Data has this potential in the infrastructure tech stack, and the reason we have tripled down since is that in each funding round the company’s horizon has been pushed forward, driven by a combination of obsessive customer-focused strategic vision and relentless execution.
The most obvious ‘10x’ that VAST delivers is the ability to provide an all-flash solution at a fraction of the price of what is available in the market, rivalling the price of a spinning disk (so perhaps a ‘100x’ when comparing performance at a similar price point). But that does not fully capture the essence of VAST’s uniqueness and what underlies its potential.
The low-cost flash is a by product of a brand new storage architecture built from the bottom up to solve industry needs that had become so calcified they were considered structural norms, e.g. tiering data between performance layers, getting locked into compute-storage ratios, scalability limitations, etc.
From early on, the team coded its architecture in away that leveraged the very latest of what was being developed on the hardware side (the persistent storage layer the architecture was designed for was not even commercially available for most of the design period).
When the architecture was complete, it managed to successfully break some of the most deep-seated tradeoffs that the industry was contending with: Price vs. performance. Resiliency vs. efficiency. Compute vs. storage scaling.
For those paying attention, the company has not been shy about explaining its architecture and the associated advantages. Here is the Breaking Tradeoffs blog post from Apr-2019, and Renen has given two long sessions dedicated to the architecture at Tech Field Day 2019 (link) and 2020 (link).There is also the legendary white paper (link),which is one of the most transparent deep dives into a company’s tech advantage we’ve seen.
VAST Data ≠ VAST Storage
In keeping with the breaking tradeoffs approach, just last month the company announced that it is effectively exiting the hardware business by launching Gemini (link),a consumption-based subscription software program.
We expect VAST Data to eventually expand beyond the storage business, a goal which was implicit in the naming of the company. The company’s vision has always been to provide the infrastructure technology that best allows the data center to serve the evolving needs of applications which do everything from finding the cure for Covid-19 to supporting autonomous driving and the most advanced virtual reality projects.
VAST Data started with storage, the backbone of the data center, but its architecture can support more abstracted layers within the data center, with the ultimate purview being the infrastructure technology software provider that sits in between the application layer on the one hand, and the hardware layer on the other, and facilitating the former getting the very best from the latter.
The market has spoken on the impact of VAST Data’s architecture to date. It has been a privilege to watch Renen and the entire VAST Data team execute in a way that exalts first principle thinking, conviction and determined effort to fulfill their ambitious vision, and we could not be more excited about what is still to come.