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Why we doubled down on Wasabi Technologies

Forestay welcomes its 3rd Unicorn in the portfolio with Wasabi Technologies (“Wasabi”)! The company has recently announced its Series D of $125M at $1.1B valuation, entering officially the Unicorns club! It has been an incredible ride since we first invested back in August 2018 as the Lead Investor of the Series B (doubled down in April 2020) when the company was making its initial sales. Fast forward four years and Wasabi has become one of the leading companies in cloud storage, disrupting a legacy industry with a unique technology, simple offering, and powerful GTM strategy under the helm of David Friend. We wanted to take this opportunity to reflect on why we became a Wasabi Investor in the first place and why we believe the future of the company is exciting.

The Boston-based company provides simple, predictable, and affordable hot cloud storage for businesses all over the world. It enables organizations to store and instantly access an unlimited amount of data at 1/5th of the price of the competition with no complex tiers or unpredictable egress fees. Wasabi is trusted by tens of thousands of customers worldwide; we are ourselves customers, and happy ones!

Co-founders David Friend (CEO) & Jeff Flowers (CTO) are renowned names when it comes to cloud storage. Wasabi is the 5th company that they have co-founded as CEO-CTO team; the last one being Carbonite which they IPO-ed on the NASDAQ and sold to OpenText for $1.5B late 2019. The wealth of experience, knowledge and know-how acquired by these two leaders over the last few decades made us believe in their vision to make Wasabi the “default place to store anything digital”. In addition, they managed to attract a world-class management team across the board, turning Wasabi into even more of a well-oiled machine. Through our firm’s representation on the company’s Board, we have witnessed first-hand an exceptional drive on all fronts from the execution team.

There are only a dozen file management systems in the world and Wasabi is one of them. The company is capable of exploiting disk drives in the most optimal way in terms of data capacity and speed of access. The secret sauce relies on a proprietary architecture and software developed internally under the helm of Jeff Flowers. Wasabi is one of the few companies in the world to have been able to develop an operating system for disk drives thanks to a vast and unique experience acquired over 30 years. This reassured us regarding the depth of the technology and edge over potential competition in the market.

Shift to the cloud, increase in IoT devices: Big Data is here and so is the need to store it! Cloud data storage market is seeing an explosive growth and presents virtually an unlimited opportunity in the future. And Wasabi is well-positioned to capitalize: 1) 100% focused on storage: no complex cloud services, 2) Cheaper & simpler pricing: No hidden charges, no egress fees, no complex tiers; just 80% cheaper than competition, 3) Faster performance: proprietary file system that enables faster access to the data, and 4) Highly secure: 11×9 durability with all data encrypted. This comforted us that Wasabi was deriving a deeper understanding of customer storage needs to bring the most compelling value proposition to the market. A tiny 1% penetration of the cloud storage market represents an opportunity of +$100B for Wasabi to chase…

When we first invested in 2018, Wasabi had four data centers. Today, the company has 13 across the world. From day one, the idea was to go global. After all, data is everywhere and sovereignty of data has become a critical issue for some customers, especially government related. In addition, Wasabi decided, brilliantly, to go with channel partners as a go-to-market strategy to scale faster. This is a win-win relationship: channel partners are happy to sell a highly needed, simple (little sales training) and profitable product. Wasabi has today more than 13k channel partners and an outstanding +80% are selling Wasabi, which is quite a remarkable achievement from a GTM perspective. And demand from channel partners is just starting!

All these factors have enabled Wasabi to quickly grow over the last few years, increasing its top line by more than 100% y-o-y and acquiring more +40k customers across the world and in all sorts of industries. There is still a large untapped potential, and we believe Wasabi is strongly positioned to grab market share. The company has not only the ingredients but also the right mix to continue its successful path to become the leading and most disruptive cloud storage company in the world.

Reaching unicorn status in these turbulent times is not an easy task; it just shows how much the right combination of a robust product with a skilled Management can achieve. Kudos to the Team for this amazing milestone and we look forward to continuing to working together and to reaching new heights in the future!