Founded in 2017 by David Friend and Jeff Flowers, Wasabi is a hot cloud storage company that provides durable, fast, and inexpensive storage for companies. Although Wasabi doesn’t target small companies, anyone can head to their website, put in their credit card, and use their service.
Wasabi’s viewpoint is that cloud storage is a commodity, like electricity or bandwidth, and it should be available to everyone without an individual having to go out and buy their own storage. In an interview with David Friend, he likens buying your own data storage facility to building your own electric generating facility. While people did this more than a century ago, it’s just not the way things work in today’s technology-driven world. Friend’s innovative approach to cloud storage has garnered him mention in The Channel Company’s 2022 Top 100 Executives list.
As the cloud storage market grows, those who enter will realize there are places they can go to store their data quickly and inexpensively. Wasabi’s popularity is a result of its ability to hold large amounts of unstructured data such as video, audio, image files, and social media posts. With this data predicted to grow by over 50 percent per year, reaching 80 percent by 2025, Wasabi is a welcome choice for a low-cost, cloud-storage solution.
Wasabi’s Success at a Glance
- As of May 2021, Wasabi signed over 25,000 customers, most who came aboard in 2020 when the company announced it tripled its revenue.
- Wasabi reports three times year-over-year growth.
- The company’s total funding is $286 million.
- Estimated annual revenue is $35.2 million per year, with a total revenue of $275 million.
- As of April 2021, Wasabi’s valuation is $700 million.
- Wasabi offers the same S3-compatible public cloud storage as Amazon Web Services (AWS), at one-fifth of the price.
Keep reading to learn more information about Wasabi, David Friend, and how the company has reached new heights.
How Targeted Advertising Paid Off
Wasabi invested a great deal of money in advertising to get their initial customers. They primarily focused on Google Ads and focused on customers who searched for Amazon S3 and Object Storage. Wasabi also spent a large portion of their marketing budget on radio ads that were featured on NPR. Online and print computer publications also featured Wasabi ads.
In total, the company spent a couple of million dollars to blast their name everywhere that made sense. Now that Wasabi has established itself as a player in the cloud storage market, they spend less on advertising and focus more of their marketing with their channel and technology partners.
Why Wasabi Spent $20 Million on Their First Center
It takes a lot of money to build a product of Wasabi’s scale and ensure its stability, as well as market the product. David Friend likens Wasabi’s business model to building apartment buildings.
You build the building. You fill it up with tenants. When the building is 70 percent occupied, it starts making money, and then you build another building.David Friend
Wasabi builds a data center, fills it up with customers, and when it hits a certain level, they build another data center. Getting it right is worth the money, so scaling becomes easier.
Friend shared that Wasabi has prospective customers whose business would be larger than the entire company. If Wasabi seals the deal on one or more of these companies, they will have to quickly scale and build more data centers. Each storage facility takes about 90 days to build.
Investors Bank on Past Successes
Many investors have done business with David Friend and his co-founder, Jeff Flowers, and made plenty of money on previous projects with them. With success in five companies prior to Wasabi, including Carbonite, investors were excited to hand over funding for this new venture. These good relationships provided the capital the company needed for startup and gave investors the opportunity to once again make money with Friend and Flowers.
Additionally, the founders chose not to finance their venture with debt and fund some of the earliest stages with the money they made from Carbonite. Although building version one of Wasabi came with a hefty $20 million price tag, the founders also knew they needed to spend money to advertise and have enough capital for operating costs.
As of August 2022, Wasabi has a total of 232 employees. Approximately 50 percent are employed in the technology division, keeping the systems running smoothly for customers.
How Wasabi Signed Over 25,000 Customers
Once Wasabi secured some business, they created a program for channel partners and technology partners. These partnerships give partners the authority to sell Wasabi cloud storage bundled with other products. As of May 2021, Wasabi has 5,000 channel and Technology Alliance partners. Most of these partners are resellers and their bundles often include backup products and video surveillance products. The resellers get a discount or margin on the products they sell, so they see a profit when they provide their customers with Wasabi service. Depending on the size of the reseller, they get a discount between 15 and 50 percent.
Currently, Wasabi has storage regions throughout Europe, including London, England, Paris, France, Amsterdam, Netherlands, and Frankfurt, Germany. There are also storage regions in Tokyo and Osaka, Japan, as well as Sydney, Australia and Singapore.
Noteworthy Data Points
- May 2016: Venture Round — $1.9 million
- May 2017: Series A — $8.9 million
- August 2017: Series B — $10.8 million
- September 2018: Series B — $68 million
- April 2021: Series C —$112 million
- May 2021: Series C —$25 million
- 2017: Launch of Wasabi
- 2018: 3,000 customers
- 2019: 15,000 customers
- 2021: 25,000 customers
- 2019: $18 million (estimated) and $1.5m MRR
- 2020: $45 million
- 2022: $54 million
Can Wasabi Coexist with AWS?
Amazon’s subsidiary, Amazon Web Services (AWS), provides a cloud storage option called Amazon S3. Like S3, Wasabi’s storage is fast and durable.
From a statistical standpoint, this means if you were to give Wasabi a million files to store, there is a chance they will lose one file every 659,000 years. All things being equal, Wasabi offers the same service as S3, but instead of charging customers $23 per terabyte, they only charge $6 per terabyte.
David Friend argues that it’s highly unlikely Amazon would drop their price to undercut Wasabi and put them out of business because they would simply lose too much money.
With increasing cloud storage use, the market is surely big enough for Amazon and other small companies like Wasabi. Plus, Wasabi gives customers a technological advantage with their proprietary file system that takes advantage of new storage technology.