UPDATED 14:10 EST / DECEMBER 06 2023


Data management startup Vast Data valued at $9.1B after $118M funding round

Vast Data Inc., the developer of a data management platform used by the likes of NASA and Verizon Communications Inc., today announced that it has raised $118 million in late-stage funding.

Fidelity Management & Research Co. led the Series E round at a $9.1 billion valuation. The raise follows a year in which Vast Data claims to have nearly tripled its revenue. According to the company, that growth bumped its cumulative software bookings past $1 billion.

Vast Data provides a software platform that organizations can use to power their on-premises storage infrastructure. The platform also works in public cloud environments. It’s used by CoreWeave Inc., a cloud operator recently valued at $7 billion, to power parts of its infrastructure.

The first challenge Vast Data’s platform addresses is that companies historically had to scale their storage and compute hardware in lockstep. That meant an enterprise wishing to add more storage also had to buy more servers even if it didn’t need them. In contrast, Vast Data says its platform can grow to exabytes of capacity while scaling compute resources separately. 

The company’s platform also removes the need for storage tiering. This is the practice of building data environments with multiple types of storage hardware, usually flash and disk. High-priority data is kept on flash while other records are sent to less expensive disk drives in order to lower costs.

Using multiple types of storage hardware creates complexity that makes day-to-day data management tasks more difficult. According to Vast Data, its platform addresses the challenge by sparing companies the hassle of using both flash and low-cost disk. The platform promises to bring down the cost of flash to a level on par with disk, thereby removing the need for the latter hardware.

Vast Data increases the amount of information that can be packed into each solid-state drive using compression and deduplication algorithms. According to the company, that reduces the SSDs’ cost per gigabyte, thereby making them price-competitive with disk. To increase storage utilization, it provides a feature that identifies files with identical data elements and merges those duplicate elements into a single copy.

One factor behind the recent growth in the company’s valuation is that its platform is optimized to store unstructured data. This data category encompasses text files and other records that are commonly processed by artificial intelligence models. CoreWeave, the cloud startup using Vast Data’s technology to support its infrastructure, focuses mainly on providing AI-optimized virtual machines.

“To be truly impactful in this era of AI and deep learning, you not only want to have a lot of data, but also high quality data that is correctly organized and available at the right place, at the right time,” said Vast Data co-founder and Chief Executive Officer Renen Hallak. 

Vast Data claims its platform manages more than 10 exabytes of data for CoreWeave and other customers. To grow its market share, the company plans to extend the platform with additional AI features. In a blog post today, co-founder Jeff Denworth detailed that one of the items on the agenda is to provide an “AI computational layer” for customers.

As part of its development roadmap, the company plans to release a tool called DataEngine that will enable customers to run computations directly on its platform using Python code. The tool will also provide prepackaged code for common use cases. According to Vast Data, those use cases include data enrichment ransomware detection.

DataEngine will complement the existing AI capabilities in the company’s platform, which include support for Nvidia Corp.’s GPUDirect technology. Typically, data that travels from a storage system to a graphics cards must go through a central processing unit before reaching its destination. GPUDirect skips that step, which allows the AI models and other workloads that run on the graphics card to access information faster.

In today’s blog post, Denworth stressed Vast Data didn’t need to raise funding to support its product development efforts. “We have been continuing our track record of operating on a cash-flow positive basis, so this funding is simply being used to raise awareness of Vast and our mission,” he wrote. Denworth added the company hasn’t used the proceeds from its previous three funding rounds, through which it raised more than $200 million. 

Image: Vast Data

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