AI storage platform Vast Data aimed for $25B valuation in new round, sources say

Vast Data, a data storage platform provider focused on AI applications, is reportedly seeking to raise a new funding round at a valuation of approximately $25 billion, a significant increase from its $9 billion Series E valuation in December 2023. The potential deal, which is not yet finalized, reflects strong investor interest driven by Vast's 2.5x-3x year-over-year growth, $200 million ARR as of 18 months ago, and its positioning against competitors like Pure Storage and Weka, as well as its expansion into database architecture competitive with Databricks.

Analysis

Vast Data, a nine-year-old AI-focused data storage platform provider, is reportedly pursuing a new funding round targeting a valuation of approximately $25 billion, a significant leap from its $9 billion Series E valuation secured in December 2023. This ambitious valuation target, while noted by a source as potentially high at the time of seeking despite impressive growth, is supported by the company's strong performance metrics, including a 2.5x to 3x year-over-year growth rate stated by its CEO in May of the prior year, and an annual recurring revenue (ARR) of $200 million as of approximately 18 months ago. Vast Data's platform, which unifies structured, semi-structured, and unstructured data storage using hardware from vendors like Supermicro, HPE, and Cisco, aims to eliminate traditional storage tiers, thereby accelerating data retrieval and reducing AI model training and inference costs. The company has maintained positive free cash flow for four years and counts large enterprises such as Pixar and ServiceNow, along with AI cloud providers like Coreweave and Lambda, among its clientele. Vast Data competes with established public entities like Pure Storage (market capitalization ~$17 billion) and private firm Weka ($1.6 billion valuation), and is also developing a database architecture to rival offerings from Databricks. Despite the current funding round's terms not being finalized and the potential for change, strong VC interest underscores Vast Data's prominent position in the rapidly expanding AI infrastructure market.

Key Decisions for Investors

• Investors should closely monitor the outcome of Vast Data's funding round as a key indicator of private market sentiment and valuations for high-growth AI infrastructure companies.
• Consider the heightened competitive landscape for publicly traded data storage providers like Pure Storage (PSTG), and assess the broader implications for the data management and AI-enabling technology sectors.
• Evaluate potential indirect benefits for Vast Data's hardware partners, including Supermicro (SMCI), Hewlett Packard Enterprise (HPE), and Cisco (CSCO), should Vast Data continue its rapid expansion and achieve its funding goals.
• Add Vast Data to a watchlist for a potential future IPO, given its significant growth, differentiated technology, positive cash flow, and strategic importance in the AI ecosystem.