Cloud-based data storage provider Wasabi Technologies Inc. today disclosed that it has raised $112 million in additional funding, led by Fidelity Management & Research, to buy more infrastructure and expand its go-to-market program.

Wasabi provides a cloud storage platform that competes with Amazon Web Services Inc.’s market-leading Amazon S3 service. The startup promises that customers can see an up to 80% cost reduction compared with keeping their information in S3, though that savings estimate comes with some caveats. Organizations that plan to delete their data after less than three weeks, for example, may not see the same cost efficiencies, according to Wasabi. 

Wasabi has signed up more 22,000 organizations as customers to date. Many of those came aboard in the last year, when the startup claims to have grown the amount of data it manages to over an exabyte while more than tripling revenue along the way, off an undisclosed base. Wasabi says its sales have more than tripled in each of the past three years.

The startup’s revenue momentum is partly enabled by a large partner program that it has built out in a relatively short amount of time. Wasabi launched its platform in 2017 and has since created an ecosystem numbering more than 5,000 partners worldwide. The startup’s pitch to partners is that the competitive prices of its platform can help them increase their profit margins by reducing their costs.

Wasabi detailed that, using the new $112 million round, it will work to expand its global channel ecosystem and boost the marketing support it provides to participating firms. The startup plans to invest in technology as well. Specifically, Wasabi intends to grow the data center network powering its cloud platform and enhance its software. 

Thanks to the $112 million funding round, Wasabi could potentially have an opportunity to invest in new software features to help customers realize a bigger return on their storage spending. AWS provides numerous such features as part of S3. Examples include Amazon S3 Storage Lens, an analytics capability that companies can use to find ways of reducing storage utilization, and Amazon S3 Object Lambda, which makes it easier to perform tasks like changing files’ format.

Wasabi already provides a number of value-added software tools on top of its core storage capabilities. The startup has built an application programming interface to make managing administrator accounts easier and, through a partnership with an outside software firm, offers a solution for speeding up the transfer of data to its platform. 

For smaller public cloud players, such value-added features can be an important source of competitive differentiation against the much deeper-pocketed industry leaders, which can afford to spend far more on infrastructure. Software can also be a source of valuable high-margin revenue. 

Wasabi’s latest nine-figure funding round shows confidence on investors’ part in the startup’s ability to stay competitive with the cloud industry’s significantly larger market leaders. That confidence is also reflected in the startup’s valuation, which it says has tripled since its previous funding. 

Wasabi has raised a total of $219 million to date. 

Photo: Wasabi