A private equity firm explains why it's spending $5 billion to acquire Veeam, a cloud software startup last valued at $1 billion

Private equity and investment firm Insight Partners is set to acquire data-management startup Veeam Software for $5 billion, one of its largest deal to date. Insight Managing Director Michael Triplett cited Veeam's rapid sales and customer growth as a major factor in the decision to invest, telling Business Insider that it would be difficult to find another software company that's accomplished all that in 12 years. As a part of the deal, the startup will now shift its headquarters from Switzerland to the US. That's part of a strategy to become the dominant player in the US, Insight Partners Managing Director Michael Triplett told Business Insider. Insight is one of the many private-equity firms rushing to become a player in the cloud-computing market, and compete with the likes of Microsoft, Amazon and Google - the latter of which announced it would buy enterprise software company CloudSimple in November. Visit Business Insider's homepage for more stories. Insight Partners is set to acquire data-management startup Veeam Software for $5 billion, in one of the private equity firm's largest deals to date. Insight's acquisition builds on a pre-existing relationship with Veeam, after Insight helped it raise $500 million last year at a valuation of $1 billion. Veeam, which helps customers manage, monitor, and run analytics on data, has already worked its way up to becoming a market leader in the EMEA region, covering Europe, the Middle East, and Africa, according to the company's press release, which referred to a report by analyst firm IDC. The core of what we do is we help protect data and we grew into a $1 billion company protecting data on-premises, Veeam's Chief Technology Officer Danny Allan told Business Insider, calling the company's software the de-facto standard for protecting data running on virtualized systems. Insight Partners Managing Director Michael Triplett told Business Insider that the company's rapid growth had been a significant factor in the firm's decision to invest. The company has around 365,000 customers, and also adds 10,000 to 12,000 customers each quarter, Triplett said. I think it would be difficult to find another software company that's accomplished all that in 12 years, Triplett said. The deal comes with major changes for the Swiss-based Veeam: Former CEO Andrei Baronov and his co-founder Ratmir Timashevare are stepping down from the board of directors, and William Largent and Danny Allan were promoted from within the company to CEO and CTO, respectively. The company will also shift its headquarters to the US from Switzerland. That's part of a strategy to become the dominant player in the US, Triplett explained to Business Insider. Shifting headquarters will allow the company to double down in the US over the next few years. The company has also set its sights on consolidating its cloud-offerings, in light of the many companies that are migrating onto the cloud. There are petabytes of data going up into the public clouds, that transition is very real, and Veeam is at the heart of it, Allan explained. Our focus has very much been and will continue to be protecting the growth of data sets and data services.., but for the cloud world as well. Private equity firms rush to enter the cloud war Companies like Veeam sit at the heart of an increasingly lucrative business, as more companies require help to begin migrating to the cloud. This has prompted private equity firms to rush to the market and acquire competitors to the likes of Microsoft, Salesforce, IBM, Google and Amazon. Insight Partners is one of the most active private equity firms in software investments, racking up a total of 33 investments in 2019 according to Pitchbook. But TA Associates and Vista Equity Partners have led private equity's charge into the software industry, racking up a total of 40 and 37 investments in the software industry so far, according to Pitchbook. Other private equity firms are also rushing into the cloud-computing market. Private equity firms Francisco Partners and Evergreen Coast Capital announced they would acquire cloud-based software startup LogMeIn for $4.3 billion in December, in a recent example. Meanwhile, legacy companies have also fought to acquire software companies amid the cloud war between the market-leading Amazon Web Services and the second- and third-place Microsoft and Google, respectively. In November, Google announced that it would buy enterprise software company CloudSimple. But the cloud-computing market still has plenty of companies left for the taking. According to the Bessemer Cloud Index, which tracks publicly-traded subscription software companies, there are over 47 companies valued between about $1 billion and $10 billion.

A private equity firm explains why it's spending $5 billion to acquire Veeam, a cloud software startup last valued at $1 billion

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