$5bn buy-out set to make backup giant Veeam a US company

Backup company Veeam is to be acquired by US investment fund Insight Partners for $5bn. The deal will see Veeam – registered in Switzerland until now – become a US company with US leadership.

Currently, more than half its revenue is generated in Europe, with about one-third coming from across the Atlantic. But that could change as the acquisition and relocation of Veeam to the US will allow it to bid for government contracts there.

The company said in a statement: “The acquisition, which is expected to be closed in Q1 2020, will enable Veeam to accelerate its Act II [Veeam’s evolution into hybrid cloud], help the company expand into new markets and continue its growth trajectory.”

In the first quarter of 2020, the company will get a new CEO, William Largent, who was previously vice-president for operations, while Danny Allan will be CTO.

Mike Triplett, Insight Partners director and member of Veeam’s board, said: “We see Veeam as a tremendous opportunity to take what has been a market-dominant business in Europe and replicate that in the US.”

Insight Partners has already bet on Veeam’s success in the US by investing $500m this time last year.

The charismatic Russian founders of Veeam, Ratmir Timashev (CEO, then VP) and Andrei Baronov (CEO) will leave following the acquisition.

Largent was first hired as CEO in 2016 at a time when Timashev wanted to devote himself to product development. But, during that period under Largent’s leadership, a large part of the Veeam sales force left and this was only stopped when the CEO was moved to head up the “finance and compensation committee” of the board a few months later.

Largent was replaced as CEO by Baronov, previously CTO. Although fundamentally a techie, Baronov’s appointment allowed confidence to be restored among the customer base and a large part of the workforce was re-hired. With the return of Largent to the company’s leadership, there is a risk that sales teams that left before will get their resignation letters out of the drawer.

Danny Allan, now head of engineering, was previously head of product strategy, so essentially in a marketing role. His duties ranged from communications campaigns on social media to organising analyst events.

On Allan’s LinkedIn page, he does not mention any of the technological challenges that face backup software makers, such as support for Kubernetes. His mission, as he describes it, is as much about developing and carrying out Veeam’s technical strategy as “to communicate with the market about our product strategy and leadership”.

Ranked in the top three backup product suppliers in Gartner’s Magic Quadrant, Veeam saw $1bn of turnover in 2019. It had planned for that level of revenue since 2017 and prides itself on serving 365,000 customers in 160 countries.

Its two main competitors are Commvault and Veritas. A key strength of Veeam is that it was among the first to support virtual machine backup and made itself a go-to product for backup in VMware environments.

Largent and Allan have spoken of this being an “Act II” for Veeam, with an opportunity for growth in hybrid cloud and management of data in the cloud.

In December, the company commercially launched backup functionality for Amazon Web Services and is set to announce similar functionality in the coming weeks for Microsoft Azure.

But Veeam is not alone as a rising star in backup. Analysts Forrester recently noted other relatively new entrants to the market, Rubrik, Cohesity and Druva, gaining interest from customers for their cloud functionality.