As organizations shift their operations to the cloud, they're experiencing more security incidents -- the result of challenges around the transitions from on-premises to remote data and infrastructure management. According to a recent survey, 80% of companies experienced at least one cloud security issue in 2022, while 27% suffered a breach with a public cloud provider -- up 10% from 2021.
That's drummed up interest in startups developing tools helping to manage and secure cloud-stored data at scale. Per Grand View Research, the enterprise data management market is set to grow 12.1% between 2022, when it was worth $89.34 billion, and 2030.
Alcion fits the bill. Its platform, which it describes as "backup-as-a-service," provides a range of disaster recovery, anti-ransomware and anti-malware and compliance tools for businesses with primarily cloud-based workloads in Microsoft 365.
Alcion today closed a $21 million Series A funding round led by Veeam, the IT company owned by Insight Partners. It's a curious investment, considering that Veeam competes with Alcion in the areas of data backup/restoration and disaster recovery (unless the investment in the precursor to an acquisition). But Alcion CEO Niraj Tolia characterized it simply as a vote of confidence in Alcion's growth strategy.
"Alcion is a company founded on the pillars of being product-led and community-driven, and has firm technical underpinnings in a modern and AI-driven architecture built for modern workloads and threat environments," Tolia said. "It solves data management challenges faced by companies storing data in the cloud, including disaster recovery, ransomware and malware threats, and compliance."
Tolia founded Alcion in 2022 with Vaibhav Kamra, a serial entrepreneur and longtime business partner. Previously, the pair started Kasten, a Kubernetes backup company that was acquired by Veeam in 2020 (hence the Alcion relationship, one presumes), and led product development and engineerings at storage startup Maginatics.
"Simply bolting on security features to legacy products doesn't provide the value customers are looking for," Tolia said. "Security has to be made integral to the design and implementation [of systems] for efficiency, speed and cost-effectiveness ... Alcion was therefore designed, from the ground up, to protect the world’s data against both malicious threats and accidents whether that be ransomware or malware."
Alcion focuses on managing and securing data stored in third-party software-as-a-service (SaaS) apps across Microsoft 365, including apps like Microsoft Teams. The platform taps AI models to detect ransomware at the file and user levels, enabling Alcion to identify targeted attacks ostensibly more effectively than services relying on static rules, Tolia says.
Alcion backs up data and provides alerts to potential malware via email and the company's web dashboard. In addition, Alcion attempts to proactively help admins ensure data remains protected -- providing recommendations based on past data activity and a "compliance score" that takes into account various security configurations and the health (i.e. completeness) of data backups.
"Alcion integrates with other parts of the customer’s security ecosystem," Tolia said, "and can drive proactive backups in response to threats that are emerging in other parts of the customer’s infrastructure (e.g., ransomware attacks on laptops)."
It's worth pointing out that there's an abundance of companies delivering solutions, including incumbents, to back up and secure enterprise data. Cyera, for instance, offers a set of tools to provide companies greater visibility over their sensitive data; it raised $100 million in June. Rubrik recently acquired Laminar, a specialist in securing data run and stored across popular public cloud platforms.
But Tolia argues that Alcion is sufficiently differentiated.
"Given our per-seat pricing with unlimited storage and free Microsoft SharePoint backups, focus on improving security and the use of AI to improve security and reduce manual work for our users, we're benefiting from a climate where ransomware is top of mind but budgets are tight," he said.
He might be right. While Tolia was cagey about giving even ballpark estimates of the size of Alcion's customer base, much less annual recurring revenue, he revealed that "a large number" of customers -- vague as that might be -- are paying for the startup's tools and services, which are actively used by thousands of individual users.
The money raised from this latest fundraising round, which brings Alcion's total raised to $29 million, will be put toward Alcion's go-to-market efforts and growing its product and engineering teams. The San Francisco-based firm plans to bring its headcount, which currently stands at 21 people, to 30 people -- or even higher -- by the end of the year.
"This was the right time to raise because of the demand we are seeing and wanting to double down," Tolia said. "We'll be adding more regions to service customers closer to where they are, expanding our current product portfolio depth, adding new data protection products for other SaaS services and building out sales and marketing."