The news comes days after Insight Partners confirmed another significant acquisition of Israeli IoT security start-up, Armis at a valuation of US$1.1 billion.
The deal between the venture capital firm and the Switzerland-based cloud data management company is expected to close in the first quarter of this year. With its acquisition by Insight Partners, Veeam’s growth is expected to accelerate into new geographies especially the US market.
Veeam was founded in 2006 and has a portfolio including backup solutions, security offerings and data management solutions for virtual environments and more recently cloud native platforms such as AWS and Microsoft Azure. The company was ranked #27 on the Forbes 2019 Cloud 100 list and has a global customer base of 365,000, including 81% of the Fortune 500 companies. Veeam has partnerships with large enterprise vendors and resellers such as IBM, Dell EMC, Lenovo, HPE, NetApp and Cisco.
The acquisition comes almost a year after the initial U$500 million investment by Insight Partners and Veeam’s announcement of ‘Act II” of its growth strategy – expanding its data management capabilities from virtual environments to the cloud. This move is a logical progression of Veeam’s successful ‘Act I’ as Ullrich Loeffler, Ecosystm Chief Operating Officer mentioned in an earlier blog. However, Loeffler notes, “Executing on ‘Act II’ significantly increases the complexity of Veeam’s business across product portfolio, technology partnerships, SaaS applications and addressable markets. Insight Partners will enable Veeam to fast track this transition from the top down by leveraging additional funding and dedicated internal growth teams and experience from over 200 M&As and 40+ IPOs.”
Veeam’s leadership team is expected to change significantly with the company now moving its headquarters from Switzerland to the US. Co-founders Andrei Baronov and Ratmir Timashev will step down from their positions on the board and in the operation, making way for an US leadership team.
Phil Hassey, Principal Advisor Ecosystm, states that the new ownership and announced leadership team under CEO Bill Largent is a gamechanger for Veeam. “Veeam simply had no choice. It has had limited US penetration to date and has been restricted from growth by the ownership structure despite best efforts on their part. It has had to back out of a significant acquisition deal, divesting N2WS after failing to get full regulatory approval in the US,” Hassey says. “In my view, this acquisition is about more than Veeam’s intention to deepen its product portfolio. It is about ensuring an access to the US market in a level playing field and it will also help with the hyper cloud vendor relationships given their strong push to US Federal Government and their US home turf.”
However, while Loeffler also sees the acquisition as a step towards an IPO, he warns, “The rapid transition to a US leadership team is likely to impact Veeam’s unique company culture. Clients repeatedly state the ease of engagement as key selection criterion, besides the solution capabilities, when choosing to partner with Veeam. The fact that both co-founders will not just step off the board but also leave as Veeam employees, will create a gap which will be challenging to fill.”