Desperate VCs are pretty much just throwing cash at Rubrik now

Boss man sees unprecedented 'opportunity to double down'

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Analysis Cloud data management startup Rubrik has confirmed speculation about new funding with a massive $180m round, but has $61m from the last round in the bank. What gives?

The startup is flush with cash after just three years of life:

  • 2014 – founded
  • 2015 – $10m A-round
  • 2015 – $41m B-round
  • 2016 – $61m C-round
  • 2017 – $180m D-round

That's a total of more than $292m, with its latest valuation being $1.3bn.

The round was led by IVP with strong participation from Lightspeed Venture Partners and Greylock Partners. They were encouraged by a near $100m annual revenue run rate and Rubrik having several hundred customers. Somesh Dash, general partner at IVP, described Rubrik as a hyper-growth company.

Lightspeed appears to have raised $95m specifically to take part in the round – check out this SEC filing.

Bipul Sinha, co-founder and CEO at Rubrik, burbled: "We see an unprecedented opportunity to double down on our pace of innovation and go-to-market worldwide," and spoke of Rubrik aggressively investing. He blogged this about the fresh round: "Why raise another round? We have not even dipped into the $61 million from Series C since we've been judiciously fueling our hyper-growth with cash flow."

Well, yes.

The company says it has more than 330 employees worldwide and is on track to add 70 to 90 additional hires each quarter. That's not going to cost more than a few million, and Sinha has got $61m in the bank? He says: "Rubrik is growing extremely fast." OK, but so fast you need a $241m cash buffer?

Why dilute the equity in the company further with a huge fundraise when you don't need the cash? Sinha blogs:

When several investors approached us to pre-empt the next round of funding, my co-founders and I saw the opportunity to double down on accelerating our business at a rate that the industry has not seen before. The market demand is there and we can further amplify our innovation lead by investing heavily in R&D.

This financing allows us to accelerate our innovation pace and build a global brand, all while upending a stagnant industry of legacy players.

OK, so Rubrik is going to hire engineers. Let's assume the average salary for a Silicon Valley developer is around $120,000 and that the all-in cost for an employer is $200,000. Then Rubrik could hire 480 of them with its banked $61m.

At the 70-90 hires/quarter rate mentioned above, an average of 80 hires a quarter would take 18 months to reach the 480 level, and Rubrik would still have its latest $180m in the bank.

We have a slight suspicion that there may be more to this than meets the eye, that Rubrik may be considering an acquisition or two. It could even be the opposite; a poison pill to fend off an acquisition. But what the hell do we know? ®


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