This morning Egnyte announced that it has taken on $29.5 million in new capital. The Series D round of funding was participated in by Seagate, CenturyLink, Northgate Capital, and prior investors Kleiner Perkins, Google Ventures and Polaris Partners.
You probably haven’t heard of Egnyte, but you know the space they compete in, butting heads with Box, Dropbox and others. However, instead of providing a purely cloud play, Egnyte is a hybrid product, fusing both local storage and cloud storage. The company’s bet is that for many large firms, the idea of having their most sensitive data on a public cloud is simply a no-go.
I spoke with the company about its financial performance, and was told that its current revenue range is between $25 million and $40 million. Egnyte declined to be more specific, but did say that it expects to become cash flow break even by the fourth quarter of 2014. Egnyte has current gross margins of 60%, but wants to boost that by a fourth, reaching 75% in the future. Egnyte expects to have between $95 million and $105 million in GAAP revenue in 2015.
According to its release, Egnyte has seen its “revenue [double] year-over-year for the past two years [and] expects to more than double revenue ending 2013.” Egnyte has now raised more than $65 million. Don’t let that number surprise you – Box recently took down $100 million in a single round.
So, where do those numbers line up with its competition? Egnyte is smaller than Box and Dropbox. Here’s TechCrunch on Box’s revenue curve:
The company was said to generate $10 million in the fourth quarter of 2011, with around $25 million in revenue for that full calendar year. Revenue for 2012 was tipped to be on track to reach $75 million. It was later reported that Box instead was on track for $85 million in revenue for that year.
And on Dropbox, from the same post:
According to the Wall Street Journal, Dropbox had 2011 revenue of $46 million, $116 million in 2012, and will produce something over $200 million this year.
There is a simply massive amount of funding, and spend in the enterprise file storage market. Google and Microsoft and Amazon are also in the space with various product mixes.
The fact that we’re mostly meeting Egnyte for the first time is something that the company wants to change, citing both international expansion and marketing as designated locations where it intends to spend its new monies.
Provided that businesses are as conservative as Egnyte expects, it could find itself well positioned to grow more quickly than its market, and absorb dollar share. That said, its competition is more intense than in nearly any other market sector. It’ll need every new dollar that it raised.
The next question for the firm will be when it expands vertically, and begins to build editing tools on top of its storage technology. That’s the next front in this war.
Top Image Credit: Flickr