Hybrid Cloud Up Time (HYCU), a self-described "backup-as-a-service" company for customers managing hybrid and multicloud environments, today announced that it raised $53 million in a "majority equity" Series B round led by Acrew Capital with participation from Bain Capital Ventures, Atlassian Ventures and Cisco Investments. In an email interview with TechCrunch, CEO Simon Taylor said that the proceeds will be put toward expanding HYCU's 300-person team with a particular focus on customer success and partnerships as well as funding the development of new products and services, including a software-as-a-service product.
HYCU, pronounced "haiku," was founded in 2018 as part of a rebranding of Comtrade Software, which was headquartered in Boston with offices in Chicago, Ljubljana, Slovenia and Belgrade, Serbia. In 2016, Taylor led the acquisition of Comtrade’s management packs for Microsoft's System Center Operations Manager to Citrix. The deal let HYCU focus on the development of multicloud data protection solutions, he told TechCrunch.
"HYCU is … focused on data resiliency," Taylor said. "The emerging threat to the explosion of data is too important to take risks on. In addition, the emergence of multicloud and hybrid cloud where companies are migrating more workloads and apps from on-prem to public cloud is accelerating at an unprecedented rate. Lastly, the number of data silos within enterprises is increasing as well. All of these are reasons why our current and new investors are working with HYCU to address these challenges."
HYCU offers software designed to protect data across multicloud and hybrid cloud environments. While "multicloud" and "hybrid cloud" both refer to deployments with more than one cloud, they differ in the kinds of infrastructure involved. A hybrid cloud blends two or more different types of clouds (e.g., an on-premises data center and public cloud like Amazon Web Services), while multicloud combines different clouds of the same type (e.g., Amazon Web Services and Google Cloud Platform).
Specifically, HYCU sells products -- most of them self-serve -- for cloud migration, security credential management, disaster recovery and backup and recovery. Taylor sees the company's offerings as competitive with legacy data protection providers with roots in mainframes, app-based data protection and management companies, and cloud-native, "backup-and-recovery-as-a-service" vendors.
"HYCU experienced much of its growth during the pandemic. Much of that was driven by the need to simplify the ransomware recovery experience," Taylor said. "The pandemic also saw the fastest rise in the use of multicloud systems. Many data protection solutions were developed before public clouds existed, and people began to realize the responsibility of protecting cloud data."
There's certainly no shortage of competition in the data backup and recovery sector. In our coverage of HYCU's Series A, my colleague, Ingrid Lunden, noted three major rivals: Rubrik, Veeam, Veritas and CommVault. Veeam was acquired by Insight in 2020 for $5 billion. As of early 2019, Rubrik was valued at a whopping $3.3 billion.
In 2019, IDC estimated that the market for data replication and protection software was worth $9.4 billion. It's almost certainly grown since. Over 80% of companies responding to Flexera's latest State of the Cloud survey reported having either a multicloud or hybrid cloud strategy.
Gartner predicted in a 2020 report that worldwide spending on information security and risk management technology and services would reach $150.4 billion in 2021, driven in part by high-profile ransomware attacks. At the same time, the analytics firm projected spending on public cloud services would climb to $304.9 billion -- up from $257.5 billion in 2020.
HYCU claims to be in a strong position for expansion, with a customer base totaling more than 3,100 organizations including U.S. state and local government agencies, the U.S. Department of Defense and "multiple" branches of the U.S. military. In anticipation of courting future public sector clients, perhaps, HYCU recently announced support for AWS GovCloud, Amazon's cloud regions designed to host sensitive data and regulated workloads.
"Wherever the need for cost-efficient, multicloud data protection as a service exists, we service those needs," Taylor said. "HYCU is positioned to continue to thrive. We were approached to start a Series B and were able to do it at a time when many tech companies were challenged to raise money. Protecting data is a need that will always be present, especially as more data is created."
To date, HYCU has raised $140 million.