JetStream Software Inc. today said it secured new early-stage funding of $7.7 million for its data protection technology aimed at managed service and cloud service providers.

The company had raised $3.8 million in an unannounced seed funding round early last year. JetStream President Richard Petersen said the company will use the funding to invest in sales, engineering, support and development of its service provider channel.

Founded in 2016, JetStream Software makes cloud-native disaster recovery and business continuity software that it claims can provide near-zero recovery point objectives or RPO and recovery time objectives or RTO. RPO refers to the maximum acceptable age of recovered files and RTO is the maximum amount of time allowed to restore application functionality following an outage. The company said this feature sets it apart from cloud-based backup and recovery software that is rooted in on-premises technology and lacks continuous data replication and instant restoration features.

JetStream’s technology provides continuous data replication using VMware Inc.’s vSphere input/output features and fault-tolerant replication and virtual machine failover to recovery sites. Each VM has one or more counterpart copies in the recovery destination that can take over operations in a few seconds. “We are the first to deliver something that was built from version one to be cloud-native,” Petersen said.

Unlike most disaster recovery software providers, the company targets its product at service providers rather than enterprise customers. With Gartner Inc. expecting 28% of information technology spending to be in the cloud by 2022, backup and disaster recovery are “the next dominoes to fall,” Petersen said. “People no longer buy these applications for their data center. It’s only logical to adapt the business model to serve service providers rather than to sell directly to the customer.”

The company’s success will depend upon finding those companies, most of which are small. International Data Corp. “has told us that there are 45,000 providers globally, of which fewer than 2,000 have disaster recovery services capability today,” Petersen said.

JetStream expects to get help from its lead investor, Digital Alpha Advisors LLC, which is closely aligned with Cisco Systems Inc. The company also has a partnership with VMware that has yielded referral business. Its revenue model is based upon the number of virtual machines the service provider protects, meaning that JetStream’s revenue scales with the partner’s.

The Series A cash infusion should give JetStream at least two years of running room, Petersen said. “We’re bringing in revenues and are in good shape from a business perspective,” he said.

Image: JetStream Software