Datto Drums Up $75M for Data Protection and Networking

In case you had any doubt that enterprise infrastructure is a hot area of tech, especially in New England, consider Datto. The Norwalk, CT-based company, which has about 80 of its 500-plus employees in Boston, just closed a big financing round to fuel its expansion.

Datto says today it raised $75 million in Series B funding led by Technology Crossover Ventures. The new money brings the data-protection company’s total raised to $100 million. General Catalyst Partners led Datto’s previous round.

Austin McChord, the company’s founder and CEO, cited good market conditions, favorable deal terms, and a strong investor fit as reasons for making the deal. “Datto is already profitable, so we don’t need the cash to fund ongoing operations,” he said in an e-mail. “With this funding, we look forward to growing our business internationally into new markets.”

A lot of people in Boston had never heard of Datto until it acquired the local startup Backupify about a year ago. The goal of that deal was to build a “total data protection” product, including software that can back up and recover corporate data across cloud storage, on-premise systems, and business apps. (Backupify’s co-founder and CEO, Rob May, is now chief executive of a company called Talla that’s focused on machine learning.)

Datto is also moving into the networking market. It has developed a networking appliance—which involves routing hardware as well as software—that it says can help businesses stay connected and manage their networks via the cloud. The up-and-coming buzzphrase here is “business continuity.” That means helping companies keep their businesses running via a mix of storage, backup, disaster recovery, and networking technologies.

In the enterprise IT landscape, storage and networks seem to be merging. As one example, Boston-based ClearSky Data is piloting a new kind of storage network service; the company recently closed a $27 million Series B round.

Datto’s competitors on the storage and backup front include EMC/Mozy, Carbonite, Symantec, and Box. “2016 is going to be a pivotal year for Datto,” McChord said. “We are looking forward to rolling out a wide variety of new tools to help our partners succeed. We are also incredibly excited to begin selling our networking product in the early part of 2016.”

Gregory T. Huang is Xconomy's Editor in Chief. E-mail him at gthuang [at] xconomy.com. Follow @gthuang

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