Veeam discusses new $500 million VC investment and indicates it buries thoughts of IPO

Veeam’s Director of Product Strategy talks with ChannelBuzz about what the deal will mean for Veeam, and for its channel partners.

Danny Allan, Veeam’s VP of Product Strategy

Data protection vendor Veeam Software has announced a major cash infusion. Insight Venture Partners has invested $500 million with strong participation from strategic investor Canada Pension Plan Investment Board [CPPIB]. Veeam says that it will leverage Insight Venture Partners’ internal business strategy arm, Insight Onsite, and capital to accelerate its expansion through both organic growth and M&A activities.

Veeam is a privately held company with a billion dollars in annual revenue, more than 325,000 customers, and with 50,000 new ones coming in every year. So why do they need and want a big cash infusion? The company is involved in a major push from its original base in the virtualization space into the cloud, and while a lot of that work has already been done, they have plans to do a lot more.

“There are two significant things about the investment from our perspective,” Danny Allan, Veeam’s VP of Product Strategy, told ChannelBuzz. “First, it means there is no need for us to have an IPO, which is a route that many companies take when they hit a billion dollars in sales. Secondly, it will enable significant growth opportunities, both organically and through acquisition.”

Veeam became much more aggressive on the M&A front under the leadership of former CEO Peter McKay, who has now left the company, with Veeam co-founder Andrei Baronov becoming the sole CEO. Allan indicated that the M&A strategy that McKay laid out of acquiring natural adjacencies to Veeam’s core business, rather than essentially acquiring customers by buying struggling competitors, will continue.

“The acquisition of N2WS, a born-in-the-cloud AWS specialist, would be a model for what we are looking to do in acquiring additional companies,” Allan said.

The investment means that Veeam will now leverage Insight Venture Partners’ internal business strategy arm, Insight Onsite as both of the organic and M&A expansion process, but Allan stressed that this will have no impact on Veeam’s product strategy.

“The product strategy will not change,” he said. “We will continue the growth path that we are on.”

Allan said that Veeam’s many channel partners should be excited about the investment.

“It gives us the ability to grow faster with them, and to provide them with more help,” he said. “We are now close to 4000 employees, and looking to add 1000 more over the next year. Given that we are a 100 per cent channel-focused company, that will enable our partners to be more successful. We will be able to do things like the investment of  $150 million we made late last year in an R&D centre in Prague. The new capital will enable us to continue to grow, improve our speed to market, and add more capabilities to the channel program.”

As part of the deal, Michael Triplett, Insight Venture Partners’ Managing Director, will join Veeam’s Board of Directors.