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April 4, 2024

Aerospike Nabs $109M to Grow Data Biz Turbocharged by AI


Aerospike is hoping to grow its business as fast as its customers are growing their data. And with today’s Series E round valued at $109 million, Aerospike has the capital to do just that, capturing more AI-linked workloads along the way.

Aerospike started out back in 2009 as a speedy key-value store few outside of Silicon Valley had heard of. Over the years, Aerospike developed a track record for serving massive amounts of data at high speeds and low latencies, eventually amassing a roster of more than 250 customers, including names like PayPal, Barclays, and Adobe.

“The early part of Aerospike was about educating the market about the art of the possible,” says Aerospike CEO Subbu Iyer, who joined the company about 2.5 years ago. “We started with ad tech, but now we have customers in financial services, which is one of our fastest growing verticals, ecommerce, retail, telecom, gaming and entertainment, and also healthcare. So it’s pretty much across the board folks want real-time access to data.”

The initial key-value store has morphed over the years, and today is a full-blown multi-modal NoSQL database. It can still serve as a high-speed cache running adopt DRAM and SSDs. But it can also scale out to store petabytes of data spanning JSON, graphs, time-series, and vector data types.

GenAI is driving data generation and retention requirements (Deemerwha studio/Shuttertock)

Now the Mountain View, California company is aiming to leverage its established record as a database provider to take a bigger share of a data market that’s being amped up by the AI revolution, Iyer says.

“Predictable real-time performance at scale is what we were built for,” Iyer tells Datanami. “We think AI is going to actually beget a lot more data, as in use a lot more data, consume a lot more data for context and better accuracy in terms of what the AI engines or the AI applications actually predict, both in generative AI and predictive AI use cases.”

Some customers are only storing 20% of their data because it’s too expensive to store any more, Iyer says. The hope is they’ll turn to Aerospike as an efficient way to get that 80% of data off the cutting room floor and into real-time data pipelines to serve predictive and generative AI use cases.

“When customers come to us, they say ‘Hey, we want to actually bring more data into our decisioning process, into our AI pipelines, whether that’s Gen AI or predictive AI.’ But they run into two issues,” Iyer says. “One is the scale wall, which is the existing solution of the existing infrastructure actually runs into a scale issue with the data sizes that they’d like to bring online.

“The second is the costs become prohibited,” he continues. “They come and talk to us now because we need less infrastructure and because we can actually scale to petabytes. So both those issues go away, and it’s really an eye-opener for the customers. We’ve built an identity in the market and people know us for what we do. And we do that really, really well.”

Today’s $109 million Series E round was led by Sumeru Equity Partners, with additional investment from existing investor Alsop Louie Partners. Aerospike selected Sumeru because the investment firm immediately understood its data strategy, Iyer says. It also gave Aerospike a chance to work with Sumeru Co-Founder and Managing Director George Kadifa, who will also join the board as part of the transaction.

“I’m personally really thrilled to actually work with George,” Iyer says. “George has been a business and operational executive value for a long time, so it made sense to actually partner with Sumeru. They saw our vision around AI, they saw the platform and how it was really built for real time performance at scale. They understand how it fits into the AI application landscape going forward. They also recognize the fact that we are building out a very robust cloud portfolio. So there was alignment across several different dimensions.”

Kadifa lauded Aerospike’s “impressive customer base and performance advantage at scale” and as beneficial for developing real-time AI.

Aerospike CEO Subbu Iyer

“We were impressed by Aerospike’s product leadership and its growing installed base of AI/ML applications operating across fraud detection, customer recommendation engines, digital payments infrastructure, and other mission-critical use cases where precision and low latency matter,” Kadifa says in a press release.

Aerospike plans to use the money to bolster R&D, continue adding talent to the team of about 210 employees, and to grow the go-to-market side of the business (marketing and sales), Iyer says.

The company’s enterprise cloud offering figures to play prominent in the growth plans, particularly as it seeks to differentiate itself from other NoSQL database providers, such as DataStax, Couchbase, and Redis, which are also chasing GenAI use cases with support for storing vector embeddings and plugging into the retrieval-augmented generation (RAG) workflow.

The company is on pace to grow revenues by about 25% this year; Iyer declined to provide specifics. The company has brought in $241 million in venture capital investment over the years. Is the company planning to go public? Iyer says that’s not currently in the works, but suggested it could be in the future.

“Right now, we’re focused on really executing,” he says. “We have a set vision, a strategy which is well-thought through. If we do a great job of executing, which we will, over the next year in 2024 and 2025, we’ll have several options that will be available to us, whether that’s as a public or as an independent entity, or otherwise.”

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