Investors pump $85 million into Code42 to fill the cloud storage gap
Backup is one of the main use cases for cloud storage services such as Dropbox and Box, but the big providers are focusing most of their competitive efforts elsewhere in areas like collaboration, a dynamic that has noticeably affected the breadth of their data protection capabilities. Code42 Software Inc. hopes to exploit that Achilles hill with the help of a new $84 million investment announced this morning.
The capital will pay for the development of new features to help organizations make more out of the data they store on its platform, the volume of which has grown nearly 5,00 percent since its previous funding round three years ago to five exabytes. For reference, the startup claims that’s about 100,000 times the size of Netflix Inc.’s entire U.S. video library.
Security teams will be among the main beneficiaries of its venture capital-driven engineering push, which is set to concentrate largely on providing better visibility of files that end-users are backing up. That data could go a long way towards helping organizations find malware that has burrowed itself among business documents and identify compliance violations.
The need for transparency is made all the more important by the fact that Code42’s platform is used mainly on a self-service basis, which means administrators have relatively few opportunities to check exactly what is being moved to the cloud. But while trusting workers to handle their own data protection does create some operational complexity, the productivity benefits seem to handily make up for it.
At least for the some 37,000 organizations that chosen Code42’s platform so far, which include 10 of the world’s 20 most valuable brands and seven out of the eight Ivy League schools. The functionality that will be developed with the help of the new funding should help grow that number even further.
The round was led by JMI Equity and New Enterprise Associates, Inc., with existing backers Split Rock Partners and Accel Partners, an early investor in Dropbox, taking the opportunity to increase their stakes. Code42’s war chest now stands at a healthy $137 million, which chief executive CEO Joe Payne estimated in an interview this morning should be more than enough until its public offering.