It's the season for M&A right now.
Publicly traded data protection and management software company Commvault announced Tuesday its intention to acquire data backup and recovery provider Clumio for an undisclosed amount.
The transaction is expected to close in early October. CommVault said the transaction will not have a material impact on earnings and will be funded with cash on hand.
Headquartered in Santa Clara, Clumio was founded by Poojan Kumar, Kaustubh Patil and Woon Ho Jung in 2017. The company is primarily focused on protecting AWS workloads, but in 2020 also introduced support for Microsoft 365.
As of February, Clamio was reporting millions of dollars in annual recurring revenue (growing 400% from 2022 to 2023) and had clients including Atlassian, Duolingo and LexisNexus. The company had raised $261 million in venture capital from investors including Index Ventures, NewView Capital and Sutter Hill Ventures prior to Tuesday's exit.
“Clamio's vision was to build a platform that could scale rapidly to protect the world's largest and most complex datasets,” Kumar, who stepped down as CEO in June and was recently named chairman of Clamio, said in a statement. “Partnering with Commvault will enable us to deliver cloud-native services to AWS customers on a global scale.”
Commvault CEO Sanjay Mirchandani sees Clumio as complementary to Commvault's existing “cyber resilience” tools for software built on AWS. He said Commvault can give companies a wider range of options for protecting and recovering their data and cloud-native apps.
Whether or not you rely on AWS, the data backup and recovery market is huge, which no doubt played a factor in Commvault's M&A decision: According to market analytics firm KBV Research, the global data backup and recovery sector will be worth $12.9 billion in 2023, with a compound annual growth rate of 10.9% from 2017 to last year.
Companies face increasing threats related to ransomware, as well as the risk of losing large amounts of data due to data center disasters, such as the fire that hit OVH in France in 2021. Data management-related regulations, such as the EU AI law, are coming into force in some countries, many of which come with strict data retention and provenance provisions.
“When an outage or cyberattack occurs, quickly resuming operations is paramount for our customers,” Mirchandani said in a press release. “Combining Commvault's industry-leading cyber resilience capabilities with Clumio's incredible talent and technology evolves our recovery services, strengthens our platform and strengthens our position as the leading SaaS provider for cyber resilience.”
The news comes after Commvault acquired cloud app resilience company Appranix earlier this year and reported better-than-expected first-quarter results.
Commvault was originally founded in 1988 at Bell Labs as a development group specializing in data management, backup, and recovery, but was designated a division of AT&T in the late 1990s and spun out as an independent company. It went public in 2006, at which point it moved its headquarters from Oceanport to Tinton Falls, New Jersey.
Commvault's previous acquisitions include software-defined storage startup Hedvig and cybersecurity company TrapX.