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Deals

U.S. cloud storage provider Backblaze eyes $1 bln valuation in IPO: sources

NEW YORK (Reuters) - Backblaze Inc is seeking to hire investment banks for an initial public offering (IPO) in 2021 that could value the cloud storage and backup software provider at around $1 billion, people familiar with the matter said on Friday.

San Mateo, California-based Backblaze is aiming to complete its IPO next year, the sources said, requesting anonymity as the plans are private.

The sources cautioned that the plans are subject to change and market conditions. Backblaze, which is backed by venture capital firm TMT Investments, declined to comment on the IPO discussions.

Backblaze, led by co-founder Gleb Budman, started in 2007 selling backup software to consumers and companies, and has since expanded into offering cloud storage services which is now the fastest-growing part of its business.

In cloud storage, it competes with the likes of Amazon.com Inc’s Amazon Web Services, although Backblaze targets smaller companies.

Backblaze said earlier this year it now stores one exabyte of customer data, which is the equivalent of more than 4,000 times the information stored in the U.S. Library of Congress, according to a 2011 McKinsey study.

The IPO plan coincides with the COVID-19 pandemic driving more businesses to operate digitally and rely on cloud computing for more of their workflow.

The global market for cloud storage services is expected to grow from $50.1 billion this year to $137.3 billion by 2025, according to market research firm MarketsandMarkets.

The U.S. market for IPOs has been on a tear in 2020, fueled by a buoyant stock market, with more than $65 billion sold in stock, up almost 40% from the total for all of 2019.

(This story corrects second paragraph to remove “early” before next year.)

Reporting by Joshua Franklin in New York; Editing by Cynthia Osterman

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