VAST Data has just announced that it has completed its Series F funding round. While the company was valued at $9.1 billion at the end of 2023 (during the Series E round), that figure has now, just under 2.5 years later, more than tripled. The company is now valued at $30 billion. The combination of growth and profitability also results in a rather extreme so-called “Rule of 40 score.”
VAST Data is still moving at breakneck speed. We can safely draw that conclusion after seeing some of the figures the company has shared regarding the closing of its Series F funding round. There are certainly some good reasons for this. First of all, there is the fundamentally different way this data platform is built. DASE (Disaggregated Shared Everything) is the platform’s underlying architecture. Especially now, with the rise of AI and everything that comes with it, this offers quite a few advantages.
Additionally, VAST Data has the timing on its side, something you often see with successful companies. The company was founded in 2016 and has responded well to developments over the years. Especially when the most recent acceleration in AI took place, the company capitalized on the momentum. That’s why you find VAST Data in many large AI data center environments. It’s no coincidence that the company states it wants to be seen as the OS for AI.
Read also: Who is developing the OS for AI? VAST Data is going all in
Rule of 40
VAST Data’s success isn’t just about its $30 billion valuation. For SaaS companies—a category VAST Data falls into, since it doesn’t sell appliances—there’s the so-called Rule of 40 score. This score means a SaaS company is considered healthy if its annual revenue growth and profitability combined total 40 percent.
The Rule of 40 score can be achieved in various ways. It could consist of two positive percentages, or a high positive percentage and a somewhat lower negative percentage, for example. Of course, such a score does not tell the whole story. To a certain extent, it is also an arbitrary number. Additionally, a Rule of 40 score for one SaaS company is not necessarily directly comparable to that of a SaaS company in a different industry.
VAST Data scores exceptionally high
Not every Rule of 40 score can therefore be assessed unambiguously. However, VAST Data reports a score of 228 percent. You can safely conclude that both profitability and revenue are well in the black. In any case, it seems difficult to us to achieve such a score with a calculation where one of the two is negative.
The Rule of 40 score of 228 percent makes it clear that VAST Data is growing extremely rapidly, both in revenue and profitability. That is undoubtedly impressive and indicates that VAST Data offers something that AI infrastructure demands.
It will be interesting to see how long this extreme growth continues. After all, in recent years, VAST Data has focused on the infrastructure where many builders are still pouring every spare euro or dollar they have. Suppliers are even laying off a lot of people just to free up capital to invest in AI infrastructure. Once that pace slows down—which will inevitably happen at some point—growth will also level off somewhat. For now, VAST Data’s growth is, in a word, astounding.
VAST Data is preparing for an IPO
When we see valuations, profitability, and growth like this, we immediately wonder if an IPO might be on the horizon. Growth like this is unlikely to last forever, so it makes sense to strike while the iron is hot.
We therefore asked VAST Data if there are any plans and when it might happen. Here’s what Renen Hallak, co-founder and CEO of VAST Data, has to say:
“In terms of going public, we’re getting ready. Our CFO, Amy, joined about a year and a half ago from Shopify, and when she came in, she said it would take roughly two years to prepare to be a public company. We’re on that journey now. I expect we’ll be ready by the end of this year, and then we’ll decide if and when to pull the trigger—maybe next year, maybe the year after.”
As we’ve mentioned ourselves, growth plays a key role in deciding when to pursue an IPO. Hallak on this:
“What motivates me is how we grow the company faster. Up until now, it’s been very clear that we can grow faster as a private company—there are fewer distractions and fewer things to manage. But as our customer base shifts toward large enterprises, that dynamic may change. Enterprises place value on working with public companies—it gives them confidence to make bigger bets.”
In other words, an IPO depends primarily on the ability to grow faster. If that’s the case, VAST Data will go for it. As long as it isn’t, there’s no rush.