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Veeam, a renowned data security and recovery solution provider, has witnessed a remarkable spike in its valuation through a recent secondary sale. This move was aimed at strengthening the company's cap table ahead of its eventual IPO. The Insight Partners-backed firm announced on Tuesday that it had successfully raised $2 billion in the secondary share sale, valuing the company at an impressive $15 billion. TPG took the lead in this investment, with Temasek, Neuberger Berman Capital Solutions, and other prominent investors also participating. The sale is scheduled to close in Q1 2025.

CEO's Perspective on the Sale

Veeam's CEO, Anand Eswaran (pictured above), emphasized that although the company didn't necessarily need to raise capital, the timing was opportune to provide liquidity to the early investors and employees. Eswaran further stated that the company aimed to bring on strategic investors as it progresses towards its eventual IPO. However, he added that there is no fixed timeline for an exit yet. "Welcoming select blue-chip, top-tier investors was critical," Eswaran said. "For the next phase of our journey, having a diversified set of top-tier investors for significant milestones like an IPO is essential."

Use of Funds

The fresh $2 billion raised will be dedicated to bolstering the company's research and development team. This investment will enable Veeam to enhance its technological capabilities and stay at the forefront of the data resilience industry. Additionally, the funds will be utilized for potential acquisitions when the right opportunities arise. Eswaran highlighted that while the company doesn't have specific M&A goals, it is actively monitoring the market for potential acquisition targets. He mentioned areas such as companies with AI technology that can assist Veeam in scaling, data resilience businesses focused on workloads that Veeam is not currently involved in, and companies with complementary technologies.

Market Competition

When Veeam was founded 18 years ago, the data resilience sector was relatively less competitive. However, with the rise of both cloud and AI, the market has become more crowded. There are numerous other companies vying for a share in the enterprise data management space. For instance, Rubrik hit the public market with a $5.6 billion valuation earlier this year. Additionally, late-stage startups like Cohesity (which raised nearly $1 billion in venture capital) and Druva (which raised more than $475 million) are also making their mark. Eswaran believes that competition is actually beneficial as it drives the industry and all players to innovate at a faster pace.

Customer Base and Market Share

Based in Seattle, Washington, Veeam was founded in 2006 and has always been committed to data resilience and recovery. Its technology covers 150 different workloads, ranging from SaaS to AI. The company's customer base includes large corporations like Shell and Deloitte, as well as federal and local governments such as the City of New Orleans. Eswaran is confident that Veeam is currently the best platform, as evidenced by its number one market share. He stated that the oversubscribed round of the secondary sale has further validated the company's direction.