Target Information

Veeam Software, recognized as the global leader in data resilience by market share, recently announced an expansion of its shareholder base through a $2 billion secondary equity offering. This transaction, which values the company at $15 billion, was orchestrated by TPG, with notable participation from Temasek, Neuberger Berman Capital Solutions, and other prominent investors. Veeam's suite of data resilience solutions is utilized by 77% of Fortune 500 companies and more than 550,000 organizations worldwide, solidifying its status as a trusted partner in the fight against data outages and cyber threats.

The company, which has generated $1.7 billion in annualized recurring revenue as of September 2024, boasts an impressive 18% year-over-year growth rate. Notably, its Software + SaaS subscription services experienced a remarkable 31% year-over-year growth. With EBITDA margins reaching 30%, Veeam consistently exceeds the established Rule of 40, demonstrating its sustained profitable growth and ability to invest significantly in innovations spanning security, cloud, and AI technologies.

Industry Overview

The global data resilience market is witnessing rapid expansion, driven by the increasing complexity of IT environments and the pressing need to safeguard data against ransomware and cyber threats. As organizations continue to transition to digital-first operations, ensuring data protection is paramount for business continuity. According to industry reports, the demand for advanced data backup and recovery services is rising, especially within sectors handling vast amounts of sensitive information.

Particularly in the United States, the landscape for data resilience is evolving. Companies across sectors are increasingly prioritizing investments in cloud solutions, recognizing the need to protect their data assets in a plethora of formats. This shift is concurrent with an uptick in cyberattacks, prompting firms to seek robust, scalable solutions that can adapt to their changing needs.

Moreover, as regulatory requirements tighten around data management and security, organizations are compelled to implement best practices in data protection. The combination of growing legal frameworks and ever-evolving technological challenges further emphasizes the necessity for competent data resilience strategies.

Veeam's innovative offerings, including its recently launched Veeam Data Cloud (VDC) and advanced solutions for ransomware protection, position it favorably to meet these emerging demands and expectations from enterprises navigating this complex digital landscape.

Rationale Behind the Deal

The recent investment round represents a strategic move to facilitate Veeam's continued growth amid an evolving data landscape. The additional capital will provide Veeam with the necessary resources to pursue strategic partnerships and acquisitions while enhancing its offerings in cloud solutions and data protection technologies.

Furthermore, the deal reinforces Veeam's dominant position in the data resilience sector, allowing it to capitalize on the increasing demand for comprehensive data protection services. By expanding its investor base, Veeam not only increases financial flexibility but also strengthens confidence in its leadership and long-term vision.

Investor Information

TPG, a leading global alternative asset management firm, spearheaded this investment in Veeam. With a portfolio that spans various sectors including private equity and technology, TPG has a robust track record of backing companies that drive innovation in the software and cybersecurity industries. The firm’s involvement underscores their commitment to fueling growth in technology solutions that adapt to evolving market needs.

Insight Partners remains the largest shareholder following this transaction, affirming their belief in Veeam's management and technology capabilities. Their history of supporting transformative software companies positions them as a valuable partner in Veeam's continued expansion.

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This investment in Veeam is viewed positively as it not only strengthens their financial standing but also enhances their market position amid fierce competition. The growing importance of data resilience solutions in today’s digital landscape amplifies Veeam's significance as a key player in this field. The market’s direction suggests that Veeam is well-prepared to capture increased demand driven by heightened awareness of cyber threats and data management complexities.

Moreover, with Veeam's consistent growth trajectory, robust revenue, and innovative product offerings, this deal is seen as a solid investment opportunity. The emphasis on cloud-first strategies and the introduction of new services like the Veeam Data Cloud positions the company to address emerging customer needs effectively.

However, potential investors must remain mindful of the evolving competitive landscape. As more players enter the data resilience market, Veeam must continuously innovate and adapt to maintain its leadership. Yet, the strong foundation built by its current products and the diverse backing from notable investors provide confidence that Veeam will continue to thrive in this dynamic environment.

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