Billion Dollar Unicorn Actifio - Focusing On Profitability, Not IPO

Traditional forms of data protection involved identifying newer and more innovative ways to copy data so that users can access it in case they lose their core data source. Over the past few years though, a new form of data protection has evolved that is helping in the management of the copies of these data tables. Known as Copy Data Management (CDM) solutions, they manage the creation and use of these copies in an efficient and automated way. It has diversified beyond simply taking copies of data into making it more meaningful by looking for a smart way to deliver copies as needed. IDC estimates the global spend on storage hardware and software to manage copy data to be nearly $44 billion as of 2016. Waltham, MA-based Billion Dollar Unicorn Actifio is a rapidly growing vendor in this space.

Actifio’s Offerings

Actifio was set up in 2008 as an incubation project for serial entrepreneur Ash Ashutosh. Ash was working as a partner in Greylock and was expected to work at Actifio for a few months, find a CEO, and then continue investing. But Ash has always “truly love(d) running companies” and he could no longer sit as a passive investor. He helped set up Actifio and is still the CEO of the company. I had met with Ash in 2013 and you can read the details of the interview here detailing the early company building process.

Actifio was set up to create a CDM solution that would improve the process of storage and retrieval of copies. It replaces siloed data management applications with a simple, application-centric, SLA-driven solution that allows customers to capture data from production applications, manage it more economically, and use it when and where needed. It’s Virtual Data Pipeline technology decouples data from infrastructure to enable improvements in business resiliency, agility, and access to the cloud. Actifio labels its services as the Enterprise Data-as-a-Service (EDaaS) which translates to allowing users the ability to access data the same way as they are used to accessing applications and infrastructure.

It delivers copy data virtualization to global enterprise customers in more than 30 countries. Its customer list includes names like IBM, Sungard, HBO, Netflix, Time Warner Cable, NEC, Sanofi, Cole-Haan, and several State, Local, and Federal government agencies.

Actifio’s Financials

Actifio charges its customers a fee for data management based on the volume of data being managed. While it does not disclose pricing, market reports suggest that its contracts from mid-market customers are worth $200,000 a year while bigger companies pay as much as $1.8-$2 million a year. It had recorded revenues of more than $40 million in 2014. Actifio was looking to break even by the end of 2016, but it became cash-flow positive in the third quarter itself.

The company is venture funded with $207.5 million in funding from investors including Advanced Technology Ventures, Andreessen Horowitz, Technology Crossover Ventures, Tiger Global Management, Greylock Partners, and North Bridge Venture Partners. Its last round of funding was held in March 2014 when it raised $100 million in a round led by Tiger Global Management at a valuation of $1.1 billion. An earlier round held in 2013 had valued Actifio at $500 million. Actifio’s rise is impressive. It had originally started as a fat startup by raising its first round on a concept.

Actifio was expected to go public last year, but the public market performance appears to have scared it away. The company has, instead, focused on improving its profitability through active cost management and layoffs. Actifio claims that it is no rush to go public, but it seems to be getting to a more solid state whereby an IPO would be desirable by all stakeholders. Investors, after all, need liquidity after almost of decade.

More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.

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For entrepreneurs who want to discuss their specific businesses with me, I’m very happy to assess your situation during my free online 1M/1M Roundtables, held almost every Thursday. You can also check out my LinkedIn Learning course here, my Lynda.com Bootstrapping course here, and follow my writings here.

Photo credit: Jared and Corin/Flickr.com.