In 2008, Marty Kagan, who previously worked at Cisco and Akamai, co-founded Cedexis, a company (now owned by Cisco) that develops observability technology for content delivery networks. Cisco veteran Hasan Aleyli joined Kagan at his Cedexis as a technology lead in 2012, and the two worked together for several years.
As Cedexis grows and works with larger and larger partners, both Kagan and Alayli become acutely aware of the cost of data storage, especially the cost of storing data logs from services and infrastructure. Now it looks like this.
“The cost of storing logs that are critical to our business will be one of Cedexis' biggest expenses next to payroll,” Kagan told TechCrunch. “Even after Hasan and I moved on to our next adventures, this worrying expense weighed heavily on our minds.”
It's not just Sedexis. A recent poll by cloud data storage startup Wasabi found that 53% of businesses exceed their storage budgets, in part because they are using more capacity than planned. 90% of companies surveyed said they expected to increase their storage budgets this year.
So in 2018, Kagan and Alayli teamed up to launch Hydrolix to address the log data cost issue across the industry. Hydrolix is a “streaming data lake” platform that provides a repository of log data from a variety of sources and a mechanism to deliver that data to apps in real time.
Image credit: Hydrolix
Kagan and Aleiri seem to have a good read on the market.
Kagan said Hydrolix is seeing revenue double from the third to fourth quarter of 2023, and grow another 75% in the first quarter of 2024. With annual recurring revenue reaching roughly $6 million, the startup is attracting new investment. This week, Hydrolix closed a $35 million Series B round led by S3 Ventures, with participation from Nava Ventures, Wing Ventures, AV8 Ventures and Oregon Venture Fund, bringing the company's total funding to $68 million.
“Log data is extremely valuable because it contains the facts that companies generate,” Kagan says. “However, data is traditionally expensive to store and query, and is most likely to be discarded in the short term. Our streaming data lake platform combines real-time stream processing, isolated storage, and low-latency indexed search. Together, they provide a high-performance, yet cost-effective log management system.”
Hydrolix's platform powers security, observability, AI, machine learning, and “log data intensive” apps for advertising, marketing, travel, and retail. Customers can run the platform on their own cloud infrastructure or as a “data layer” to power pre-built apps devised by partners.
“All Hydrolix data is 'hot', eliminating the need to manage multiple storage tiers,” says Kagan. “This approach enables Hydrolix to deliver terabytes of real-time query performance to our customers. Our software is capable of providing both real-time analysis of large volumes of streaming logs and ad-hoc analysis of years of raw logs. It can be applied to a wide range of use cases for data. “
Hydrolix, which has about 90 corporate and public sector customers and about 60 employees based in Portland, Oregon, is looking to expand further. Buoyed by its Series B funding, the company plans to expand its sales and partner channel operations, as well as divisions focused on marketing and customer onboarding.
“The prospects for pipeline acquisition and expansion transactions are strong,” Kagan said. “In fact, our recent growth is one of the main reasons for our increased interest in Series B.”