SoftBank leads $250 million investment in data storage startup Cohesity

Cohesity, an enterprise-focused data storage startup based in San Jose, California, has raised $250 million in a series D round of funding led by SoftBank’s Vision Fund, with participation from Sequoia Capital, Cisco Investments, Hewlett Packard Enterprise (HPE), Morgan Stanley Expansion Capital, Battery Ventures, and Trinity Ventures, among other earlier investors.

Founded in 2013, Cohesity focuses specifically on secondary data storage, which means its platform helps companies consolidate their vast banks of non-mission critical data, such as backups, analytics, development copies, and more. According to Cohesity, around 80 percent of companies’ storage capacity is consumed by secondary data, which can be expensive to maintain and is a poor resource allocation for companies that rarely need access to the data. Plus, it can be difficult to search and analyze the data, especially if it’s spread across multiple silos.

This is the problem that Cohesity is looking to fix with its “hyper-converged” platform.

Prior to now, Cohesity had raised around $160 million in funding, with its previous $90 million series C round co-led last year by Alphabet’s venture capital arm GV and Sequoia Capital. With another chunky $250 million in the bank, Cohesity said it plans to double down on its global expansion efforts.

“My vision has always been to provide enterprises with cloud-like simplicity for their many fragmented applications and data — backup, test and development, analytics, and more,” said Cohesity CEO and founder Mohit Aron, who previously cofounded converged datacenter infrastructure giant Nutanix. “Cohesity has built significant momentum and market share during the last 12 months, and we are just getting started.”

Japanese technology giant SoftBank has been investing heavily in startups around the world after announcing its much-hyped $100 billion Vision Fund back in 2016, but enterprise software companies such as Cohesity had not featured prominently in the fund’s portfolio, although SoftBank did lead a $250 million investment in Slack last year.

“Cohesity pioneered hyper-converged secondary storage as a first stepping stone on the path to a much larger transformation of enterprise infrastructure spanning public and private clouds,” added Deep Nishar, senior managing partner of SoftBank Investment Advisers. “We believe that Cohesity’s web-scale Google-like approach, cloud-native architecture, and incredible simplicity is changing the business of IT in a fundamental way.”

The latest raise comes hot on the heels of the departure of a number of senior executives at the company, including chief financial officer (CFO) Seamus Hennessy, who left his position in December after just five months in the post.