There may be a global pandemic ravaging throughout the world, causing economic crises and a state of uncertainty. However, the Israeli high-tech arena proves yet again that it writes its own rules, as just recently cloud data services and management giant, NetApp announced a $450 million acquisition of Israeli startup, Spot.
The Israeli startup, formerly known as Spotinst, was first discovered at Geektime’s 2015 Startup Arena event. Recently, in a conversation with Geektime, Spot CEO Amiram Shachar revealed that despite the acquisition process starting when the pandemic first broke out, there wasn’t a moment of fear that NetApp would postpone the deal: “There was no doubt in our minds that the deal would happen, everything was dependent on product synergy, which was at an all-time high.”
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Spot offers cloud service and management optimization for SaaS companies, executed by AI software that among other things predicts price changes, essentially helping companies find cheap cloud infrastructures (called spot instances) and manage them. Using AI software, the company claims that it can save up to 90% of cloud computing and storage, which count for about 70% of cloud expenses. Making the company’s solution especially attractive during the COVID crisis, which has urged many companies to transition to a cloud infrastructure.
These days, in the cloud infrastructure industry, speed is the name of the game. The public cloud waste stems from disabled and surplus resources, turning into a big problem for customers, which further slows down the adoption of the public cloud,” explains Anthony Lye, Senior VP & GM public cloud at NetApp. The combination of NetApp’s shared storage platform for blocks, files, and objects with Spot’s computing platform offers a leading solution for ongoing cost optimization for all workloads - both for the natural cloud, as well as older systems.” It looks like NetApp has once again set their ‘purchase Israeli startup’ reminder because just a year ago they completed the acquisition of Cognigo for $65 million.
Up to date, Spot had secured a total of $52.6 million in funding from various different investors, including Intel Capital, Vertex Venture, Leaders Fund, Highland, Pico Partners, and Springtide Ventures. Now, following the acquisition, these investors will get to taste the fruits of their investment. Though this mega-deal does come at a bizarre stage considering that just a year ago Spot purchased a small American company called, StartCloud, which enabled the Israeli company to enter the AWS Reserve Instance Marketplace.
After acquiring a subsidiary yourself, what made you want to sell at this point?
Shachar explains: “Many companies find themselves pinned to a wall searching for a buyer. Spot, on the other hand, is a very stable company, with a strong balance sheet and a proven track record of millions of dollars in profits. The decision became a no-brainer mainly because our cloud vision and Roadmap runs in parallel with NetApp’s, which allowed us to accomplish set business goals in a shorter amount of time, with an extensive resource backing while still conserving the company’s brand and technology. We are extremely excited to join the NetApp family, and together build the future of cloud infrastructure.”
Spot first jumped on the high-tech radar at Geektime’s Startup Arena contest, after they were founded by Amiram Shachar, Lirran Polak, and Aaron Twizzer. The company’s offices spread around the globe with offices in Tel Aviv, San Francisco, New York, and London. The company also claims a high-profile list of clients, among them Sony, Samsung, Qualcomm, and TicketMaster.