Druva Secures $147 Million in New Funding

Druva, a provider of cloud data backup solutions, has announced the completion of a $147 million capital raise. The investment round was spearheaded by Caisse de dépôt et placement du Québec (CDPQ), the organization responsible for managing Quebec’s pension fund. Neuberger Berman also participated in this funding initiative.

Previous Investment and Market Growth

Existing investors, including Atreides Management and Viking Global Investors, contributed capital to this deal as well. Druva previously secured $130 million in funding in mid-2019, led by Viking, which valued the company at approximately $1 billion.

At that time, industry analysts noted the substantial market opportunity addressed by Druva’s software-as-a-service (SaaS) backup offerings. Earlier funding rounds of $51 million (2016) and $80 million (2017) were also previously reported.

Impact of Digital Transformation

The SaaS market has experienced significant expansion in recent years, particularly in 2020, driven by increased digital transformation initiatives across businesses of all sizes. This growth trajectory makes Druva’s new capital round a logical progression.

Strategic Partnership with Dell

A collaboration between Dell and Druva, initially reported in January, was officially unveiled earlier this month. This partnership is expected to provide Druva with a substantial customer base for its services. The company reported “almost tripling its annual revenue in three years” earlier in the year.

Secondary Shares and Investor Commitment

The funding round included some secondary share sales. Neuberger Berman managing director Raman Gambhir indicated that acquiring these shares proved challenging, attributing this to some earlier investment funds nearing the end of their investment lifecycle.

Druva CEO Jaspreet Singh emphasized that the company’s investors are prioritizing the long-term success of the business over immediate returns.

Potential for IPO

Singh conveyed to reporters that Druva’s business is currently experiencing accelerated growth. The company surpassed the $100 million ARR milestone in 2019, leading to speculation about a potential Initial Public Offering (IPO).

However, previous predictions regarding an IPO timeline have not materialized. Past reports suggested a public offering could occur within a year (2016) or 12-18 months (2019).

Long-Term Investor Strategy

With a revitalized financial position, a favorable market environment, and early investors showing continued support, Druva has ample time to consider its options. Singh highlighted that the new financing round attracted investors focused on establishing a long-term stake in the company, a common strategy before an IPO.

Gambhir revealed that his firm has already expressed interest in acquiring shares in Druva’s eventual IPO.

Expansion Plans and Hiring

As is typical for companies securing new funding, Druva intends to use the capital to expand its workforce, enhance its technology, and strengthen its go-to-market (GTM) strategy. The CEO indicated that the company currently has over 200 open positions within its GTM organization.

Unique Operational History and Margin Defense

This funding round represents another growth phase for a late-stage enterprise software company. It’s noteworthy that Druva relocated its operations to the United States at the request of its initial investors, according to Singh.

Furthermore, the company has developed innovative cloud technologies to maintain software-like margins despite significant data storage requirements.

Anticipation for S-1 Filing

Industry observers are eagerly awaiting Druva’s S-1 filing, the document required for companies planning to go public. The anticipation for this event is building.