Dropbox competitor Egnyte gets $75 million from Goldman Sachs
Five years after it last raised venture capital financing, enterprise cloud storage company Egnyte announced today that it has raised $75 million from Goldman Sachs.
CEO Vineet Jain says the company has been cash flow positive since the fourth quarter of 2016 — and talked last year about preparing for a 2019 IPO — so the announcement comes as a bit of a surprise. Jain told VentureBeat in a phone interview that the new funds are to accelerate the company’s growth beyond sync-and-file sharing.
Founded in 2007 and headquartered in Mountain View, California, Egnyte came up around the same time as enterprise cloud storage companies like Dropbox and Box. It’s now raised $132.5 million in total, from investors that include GV and Kleiner Perkins.
Its value proposition lies in the fact that it’s a hybrid vendor — allowing companies to decide if they wanted to run Egnyte’s file sync and sharing software as a cloud service or on their own on-premise datacenters. About two years ago, the company debuted Egnyte Protect, its first new product since launch. Egnyte Protect uses machine learning to identify and secure sensitive content in the cloud.
“We started seeing that as the comfort level of moving your entire content into the cloud or the combination of the cloud on-prem has grown, and also the solution adoption is getting mainstream … concerns around data security became more and more pronounced,” Jain said.
Jain said that this will be the last round of funding before the company pursues an IPO, but didn’t say how the new round of funding has shifted Egnyte’s timeline for going public. He did, however, downplay the significance of an IPO as an “interim milestone,” saying that the “biggest value creation within the company happens post-going public.” However, with Dropbox and Box both public, Egnyte will continue to face questions about when it will do so.
Egnyte didn’t share exact revenue numbers, but said that the company’s been seeing a compound annual growth rate of more than 30 percent year-over-year since 2015.
Currently, Egnyte has more than 14,000 customers, mostly small and mid-market companies, though it is adding more large customers, like Ikea, Coach, and Nasdaq.
With the new funding, Egnyte also plans to expand its sales and customer success offices in Raleigh, North Carolina and Spokane, Washington. The company has more than 450 employees, with most of its engineers in Mountain View or its R&D center in Poznan, Poland. But Jain said it expects to more than double both the Raleigh and Spokane offices by the end of 2019 — to nearly 100 people in Raleigh and 200 people in Spokane.
“The talent is out there [in Spokane and Raleigh], and they don’t have the sense of same entitlement we might see in other places,” Jain said, though he acknowledged that the engineering roles will continue to remain in Mountain View and Poznan.