Hewlett Packard Enterprise (HPE) acquires Israeli startup Zerto, which develops a cloud data management and security platform for preventing ransomware, cyberattacks, and unplanned downtime. The American technology giant will shed out $374 million in cash for Zerto. However, this represents a humble exit for a startup that had raised nearly $183 million since founded in 2009.
$130M of run-rate revenue
The Zerto platform enables enterprises to quickly recover from technological emergencies, such as down servers and ransomware attacks. Zerto operates in the growing data replication and protection and high-growth disaster recovery as a service (DRaaS) market. Additionally, the Israeli technology easily replicates and migrates data between VMware vSphere and Microsoft Hyper-V environments and natively to Amazon Web Services and Microsoft Azure.
According to the acquisition announcement, Zerto’s is expected to contribute more than $130M of run-rate revenue at software gross margins with approximately one-third of revenues incremental to HPE’s as a service ARR. Zerto has been chosen by more than 350 service providers and 9,000 customers to help with recovery from ransomware and cyberattacks. The Israeli product will be added to HPE GreenLake and will continue to deliver on HPE Storage’s shift to a cloud-native, software-defined data services business.
Zerto was founded in 2009 by brothers Ziv Kedem, formerly founded Kashya -- acquired by EMC for $160 million; and Oded Kedem. The company has 500 employees split between offices in Boston and Herzliya. According to Pitchbook, Zerto has raised almost $183 million to date. In the past, the startup had planned on going public at a valuation of $600 million. Among the company’s investors, we find Battery Ventures, Claltech, Pitango, and others.
“Data is now the most critical asset,” said Antonio Neri, President and CEO, HPE. “With the explosive growth of data at the edge and across hybrid environments, organizations today face significant complexity in managing and protecting their data. Zerto’s market-leading cloud data management and protection software expands HPE GreenLake cloud data services, allowing customers to protect their data and rapidly act on insights, from edge to cloud.”