Alcion, a backup vendor specializing in AI-driven backup with a focus on security, has recently secured $21 million in a funding round led by Veeam Software. Veeam, which acquired Kubernetes backup and recovery provider Kasten in 2020, supplied an unspecified amount of the series A round for Alcion. The founders of Kasten, Niraj Tolia and Vaibhav Kamra, now serve as the CEO and CTO of Alcion, respectively.
Alcion’s Microsoft 365 backup product has officially become generally available after being in public preview since May. The product was in private preview from January to May, and it is currently targeting small and medium-sized businesses (SMBs). The funding received will support the general availability and go-to-market expansion of Alcion’s backup-as-a-service platform for Microsoft 365 and its future protection of other software-as-a-service (SaaS) services. Alcion aims to expand its reach to enterprises and managed service providers (MSPs). Additionally, the funding will enable Alcion to make new hires, with the goal of reaching approximately 30 employees by the end of the year, up from their current 22 employees.
While it is early for Alcion to raise funding, there is a strong sense of trust between Veeam and Alcion due to their previous collaboration. Tolia highlighted the Kasten acquisition and his prior work with Veeam’s leadership team before starting Alcion. According to Tolia, the decision for Veeam to invest in Alcion was driven by their shared interest in the broader market, despite having different approaches. Tolia clarified that Veeam’s investment was purely financial, with no sharing of intellectual property involved.
Tolia expressed openness to exploring a partnership with Veeam, which also offers a Microsoft 365 backup product. However, when asked about the possibility of an acquisition by Veeam, Tolia emphasized Alcion’s focus on maintaining an independent path, achieving growth, enhancing their product, and delivering value to their customers. Krista Macomber, an analyst at Futurum Group, mentioned that based on her understanding, there are currently no plans for an acquisition.
The investment from Veeam is expected to support the further development of Alcion’s technology. Alcion’s AI-supported backup and recovery solution specifically targets evolving cyber threats, including ransomware. Christophe Bertrand, an analyst at TechTarget’s Enterprise Strategy Group, pointed out that Alcion’s approach to the market is distinct from Veeam’s offerings. While Alcion offers a ransomware-focused SaaS product that leverages AI, Veeam provides a backup and recovery platform for various workloads, such as cloud, SaaS, physical, and containers. Bertrand believes there will be minimal overlap between the two companies’ offerings, as organizations often choose Veeam for its comprehensive backup capabilities.
Veeam declined to be interviewed for this article but CTO Danny Allan emphasized in a press release that combating cyber attacks like ransomware requires a collective effort from the industry. Allan stated that Veeam’s investment in Alcion aligns with their commitment to champion and foster new cybersecurity innovation.
In addition to Veeam, Alcion’s series A round involved participation from all previous investors. Alcion initially launched with $8 million in seed funding. While the specific customer count was not disclosed, Tolia reported that the number of Alcion customers has increased by over 700% since May. Alcion claims to manage 1 petabyte of logical backup.
Alcion’s approach to security involves threat detection, intelligent backup scheduling, encryption, and delete protection. Since their launch in May, the company has continuously updated its product, incorporating features such as immutable backups, malware alerts, compliance scoring, and data protection insights. Alcion’s focus is currently on the Microsoft 365 ecosystem, but Tolia stated that customers have expressed interest in additional protection for other parts of the Microsoft ecosystem, such as Dynamics. The company also intends to explore protecting other SaaS applications, potentially including Salesforce and Google Workspace, in the future.
While Alcion is not yet profitable, Tolia does not foresee the need for additional funding in the near future. He emphasized the importance of ensuring Alcion’s success over the next 12 months and expressed gratitude for the significant financial runway currently available to the company.
In the broader backup market, other vendors have also made security-related moves. For example, Rubrik recently acquired Laminar Security, and Commvault acquired TrapX, a cyberdeception company. According to Bertrand, Veeam’s investment in a company that also offers Microsoft 365 backup may initially seem confusing. However, he believes it signifies the vendors’ focus on the convergence of multiple markets, driven by the increasing prevalence of ransomware attacks.
Overall, Alcion’s recent funding round led by Veeam positions the company for significant growth and expansion. With a focus on AI-driven backup and an emphasis on security, Alcion aims to address the evolving cyber threats faced by organizations. The investment from Veeam will support Alcion’s development efforts in protecting Microsoft 365 and future SaaS applications. While there is potential for collaboration between Alcion and Veeam, Alcion remains committed to its independent path, product enhancement, and delivering value to its customers.