VAST Data plans funding round so early stockholders can get cash

VAST data is in the final stages of raising an estimated $1billion in cash at a $30 billion valuation according to Israel’s Globes media outlet.

VAST Data sells all-flash arrays with a DASE (Disaggregated Shared Everything) design that separates compute (controllers) from data (storage drives) along with sophisticated data protection and reduction. Its arrays are highly scalable and, along with their software stack encompassing a complete AI pipeline, store, and AI agent operating capability, have proved to be popular. This is particularly so in the AI training and Neocloud area, with deals like ones with XAi, Lambda, and CoreWeave for $1.17 billion.

VAST was founded in 2016 and has raised thus far a total of $381 million through five rounds, the last in 2023 for $118 million when it said its annual revenues were in the $200 million area. Reuters and Sacra expect its revenues to reach the $600 million level this year.

Globes reports a plan that the bulk of the cash will be raised by current stock holders selling existing shares in a so-called secondary round. They will sell 5 to 6 shares for every new issued share, meaning there will be between $150 million to $300 million of new shares issued and $700 million to $850 million of cash raised by selling existing shares. The current stockholders who would be selling shares include existing investors, founders, employees and option holders.

It is an opportunity for them to cash out some or all of their stock and benefit from the rise in VAST’s valuation since they obtained their stock. The report says that early investors, such as Israel outfits 83North and Greenfield Partners, received shares when VAST was valued at the tens of millions of dollars level.

VAST’s valuation in the secondary round will be $25 – 27 billion; around $25/share. That could generate a return in the hundreds of millions of dollars area for such early investors. For example, Greenfield Partners, which led the 2019 B-round with VAST then valued at several hundred million dollars, could potentially sell shares at a 40X to 60X profit on its original investment.

A final point; if an IPO were imminent there would be no need for a round like this. This suggests any VAST IPO would take place in 2027 or 2028, or later.