Background of Backblaze
U.S. cloud storage provider Backblaze is exploring a potential $1 billion valuation as part of an initial public offering (IPO).
Backblaze is a provider of cloud-based storage solutions, established in 2007 and currently with over 2000 enterprise customers worldwide. In the following article, we will briefly describe Backblaze and what potential investors need to know about the company before investing.
History of the company
U.S. cloud storage provider Backblaze has been growing at an impressive rate since the company’s founding in 2007. The Santa Clara, California-based tech firm, which provides cloud-based backup and data recovery services, has become one of the largest cloud storage companies in the U.S., having over 1 million customers worldwide and an annual revenue of $155 million as of 2019.
Backblaze began as a consumer product back in 2007 and that eventually evolved into a business product in 2010 when the company started offering enterprise grade cloud storage solutions to businesses. They were among the first to pioneer the unlimited storage model, which changed the game for cloud storage providers by eliminating arbitrary limits on how much data businesses could store in their clouds affordably. Backblaze now offers private and public clouds (B2), unlimited data backup services, private key encryption (AES 256), hardware & software inventory management (Asset Security) as well as physical or virtual machine replication/restoration services for companies that need it via B2 Replicate.
Since its founding almost a decade ago, Backblaze has gone from strength to strength, being recognized by Gartner for their “Unlimited Backup Services” and having multiple hosted products utilized by companies worldwide such as VMWare Cloud Foundation (Big Data Extensions & Container Volume Drivers). With this impressive reputation and ongoing growth trajectory, Backblaze has now set their sights on an initial public offering (IPO) with plans to potentially raise to USD 1 billion valuing them at between $3 billion – USD 4 billion – making them one of Silicon Valley’s exciting new unicorns!
Overview of their services
U.S. cloud storage provider Backblaze is a service that offers unlimited online cloud storage to its users. The company’s cloud storage solutions enable users to store, access and share data with near-instant global access, so they can work from anywhere anytime without worrying about data loss or slow file transfers.
Backblaze’s backup service is designed for consumers and businesses of all sizes and allows them to backup their entire network of computers in one easy step regardless of size or location. It also has flexible plans so users can choose the most important features for their business, such as remote restores for mobile teams and remote management capabilities for IT professionals. The service also includes additional enterprise features such as rest and transit encryption, device synchronization, and automated backups triggered by user-defined rules.
Backblaze also provides archive services so users can store large amounts of unstructured data in the cloud without any upfront configuration or maintenance requirements. With this service, customers can access their archive data from anywhere through a web browser or native application with no additional IT resources required onsite.
By offering these services, Backblaze has become one of America’s top cloud storage providers and is now valued at $1 billion ahead of an initial public offering (IPO). This makes it an attractive option for potential investors looking to diversify their investments with a tech company that will likely continue growing in value over the years ahead.
U.S. cloud storage provider Backblaze eyes $1 bln valuation in IPO: sources
U.S. cloud storage provider Backblaze has been targeting a valuation of $1 billion when it looks to go public. However, potential investors will want to closely examine the company’s current financials before getting involved.
Here is a breakdown of their current financials.
Revenue and profitability
According to sources familiar with the matter, U.S. cloud storage provider Backblaze is eyeing a $1 billion valuation in its upcoming initial public offering (IPO). Therefore, as potential investors consider the company’s stock, they must be aware of Backblaze’s current financials, particularly its revenue and profitability.
Backblaze reported total revenues of $140 million for the 12 months ending June 30, 2020, up from $56 million for the prior year. This growth was driven mostly by an increase in revenue from cloud services, which jumped from $43 million in 2019 to $118 million in 2020. The remaining revenue of $22 million came from hardware product sales and support services.
Overall gross profit margins were relatively constant at 62% for both years and its net profit margin was slightly lower than average reaching 27%. It also reported higher cash balances, increasing from $44 million to over $63 million during the same period. Compared to reported net losses of comparable companies, this performance makes Backblaze a lucrative prospect for potential investors looking at an IPO listing.
Cash flow
Strong cash flow is crucial to any company’s successful initial public offering (IPO). Recent sources have stated that U.S. cloud storage provider Backblaze could be valued at $1 billion in its proposed IPO. As potential investors consider their options, they must look closer at the company’s financials to make an informed decision about their investments. In particular, the cash flow statement indicates Backblaze’s liquidity, operating performance, and ability to pay off debts with current assets. This can help potential investors risk management decisions by giving them more insight into Backblaze’s near-term financial future and capital structure.
Backblaze reported strong cash flow for its most recent fiscal year ending December 31st 2019, with net operating cash flows increasing 5% from the previous year to $143 million and net investing activities coming in at negative one million dollars compared to negative six million dollars in 2018. However, the company also ended 2019 with net financing activities totaling $190 million or 8% lower than 2018—possibly due to steps taken towards an upcoming IPO this year such as building out a longer-term debt portfolio or repurchasing common stock?
As investors consider the risks associated with any new offering—particularly those associated with technology companies—it is important to understand a company’s current financials related to generating cash flows and building strength across its current and future balance sheet.
Balance sheet
The balance sheet of U.S. cloud storage provider Backblaze is an important financial document that potential investors will want to look at when considering the company’s future potential as a publicly traded entity. The balance sheet provides insight into the company’s financial standing, detailing its assets, liabilities and equity at a particular time.
Backblaze’s balance sheet reported total assets of $1.155 billion as of 30 June 2020 and total liabilities of $216 million, resulting in shareholders’ equity of $939 million for the same period. These assets ranged from cash and equivalents valued at $76 million to property, plant and equipment valued at $588 million and intangible assets valued at $538 million. This suggests that the company is well-positioned for approval for its initial public offering (IPO).
In addition to providing insight into Backblaze’s overall financial position, looking closely at the balance sheet helps investors understand how quickly the company is growing by examining changes in its accounts receivable, inventory, cash flow cycles and more. By analyzing these variables on an ongoing basis, potential investors can get a sense of Backblaze’s future potential over time as they consider whether or not an investment would be wise.
Potential IPO
U.S. cloud storage provider Backblaze is eyeing a $1 billion valuation as it considers a possible initial public offering (IPO). This would make Backblaze one of the largest tech companies to go public in 2020. Potential investors interested in a Backblaze IPO should examine the particular details of this offering.
This article will explore the key elements that potential investors should consider before investing in a Backblaze IPO.
Valuation target
Valuation target is the estimated market capitalization or value of a company upon it becoming a public company through an initial public offering (IPO). In an IPO, large private companies turn to the capital markets to raise funds for various purposes such as: business expansion, working capital, stock buy-backs and debt repayment.
A valuation target is reached when parties representing the issuer and potential investors have conducted due diligence on the business of the issuing enterprise and subsequently come to an agreement on a realistic pricing level at which point the enterprise can go into the public markets.
In making its determination, evaluation teams typically consider factors such as current market conditions and development trends, existing comparable companies, size of market opportunity for particular products or services, management’s track record, existing revenue/losses/cash flows prospects for growth and income distributions. In addition, ascertaining a valuation target can involve investing Banks, venture capitalists, and equity analysts with deep understanding in specific fields such as technology stocks or industrial housing projects. Such experts can provide invaluable insight into a high stakes negotiation between multiple parties.
Ultimately they must reach a consensus opinion so that investors joining an offering will be paying fair prices that accurately reflect what they would pay through alternative outlets such as private placements. Ultimately this means valuing risk versus reward to satisfy both parties goals when investing monetary assets into long term strategies including investments in IPOs.
Timing of the offering
According to sources, U.S. cloud storage provider Backblaze is planning an initial public offering (IPO) that could see it reach a valuation of approximately $1 billion (USD). This news has come after strong growth for the company, which offers computer backups and cloud storage services. As potential investors contemplate the opportunity to become involved in this IPO, they need to understand the context in which this offering takes place.
Backblaze intends to go public as soon as possible and expects that the timing may depend on market conditions and regulatory development related to coronavirus relief measures such as the CARES Act. However, there is no firm timeline for this offering due to current uncertainty surrounding such matters. Therefore, potential investors should be aware that they might not have timely information when deciding about investing or not investing in this potential IPO.
Risks
Investors considering investing in a potential Backblaze IPO need to understand the risks associated with the company. While a $1 billion valuation may sound attractive, potential investors need to consider the unique risks of investing in the U.S. cloud storage provider and its prospective IPO.
Several elements must be thoroughly evaluated before investing, from the business model to the competitive landscape.
Competition
U.S. cloud storage provider Backblaze eyes a billion-dollar valuation in its potential initial public offering (IPO). But potential investors need to weigh the various risks around this investment. One of the major risks is the competition in the cloud storage market.
Cloud storage services such as Google Drive, Microsoft OneDrive, Box, Dropbox and Amazon S3 are well established and offer a wide range of products and services that overlap with Backblaze’s offerings. However, each competitor has its differentiated features and often users tend to choose them depending on their use case scenario; making it harder for one provider to gain an edge over others in terms of market share.
For example, Google and Microsoft are dominant due to their large content ecosystems; Amazon’s S3 service or Simple Storage Services are preferred for web hosting and archiving purposes; while Dropbox stands out amongst other competitors due Newton AI powered automation tools. In addition, many providers such as Box already have an established presence in enterprise level agreements – a segment of cloud storage market with huge potential for growth where Backblaze has yet to make its mark on customers at scale.
All these factors can create heavy competition for any new player entering this market speculation, which could strain Backblaze’s overall financial prospects in the long run if their success isn’t carefully managed. Therefore, before making any investing decisions related to a possible Backblaze IPO, it is important to understand all sides of the business – including how they plan to gain a competitive advantage against established players within the U.S cloud storage sector.
Regulatory environment
The regulatory environment is an ever-evolving landscape and often a source of uncertainty and risk to businesses. Regulatory changes can cause significant disruption, lead to financial losses, and even threaten a company’s survival.
The potential financial impact of new regulations, or changes to existing regulations, must be considered when making strategic decisions. Understanding the nature of the laws and regulations that affect a business is essential to properly prepare for potential risks; this requires ongoing monitoring and thought about how those changes may impact legal obligations.
Additionally, organizations should ensure that their procedures are written under applicable laws and that their employees understand them adequately. Finally, staying up-to-date on new regulatory developments is invaluable for companies that want to manage risk effectively.
Technology risk
Technology risk is an important factor that investors should consider when evaluating the potential of a public offering by U.S. cloud storage provider Backblaze. Cloud storage relies on efficient technology to store and access data and deliver excellent user experience while providing data security and reliability. Any disruption or failure of this technology could negatively impact Backblaze’s business operations, customer base and reputation.
Backblaze’s main competitor, Dropbox, recently experienced a significant outage in 2018, resulting in a revenue loss due to the inability to access data hosted on its servers. Additionally, suppose Backblaze fails to keep up with industry trends or successfully implement new technologies such as Artificial Intelligence (AI) or Machine Learning (ML). In that case, it could also risk materially affecting its bottom line.
Investors should also consider how secure Backblaze’s services are and whether any news stories about security breaches would impact their investment decision. If customers cannot trust that their data is secure, it will result in lost revenue for Backblaze. Therefore, the company must focus on improving its security measures and processes to maintain its competitive edge in the industry going forward.
Opportunities
As the U.S. cloud storage provider Backblaze eyes a potential $1 billion valuation in a potential IPO, potential investors must know the opportunities available. From understanding the financials to the potential products and services, there are many aspects that potential investors should be aware of before investing.
Let’s look at some of these opportunities and how they can benefit potential investors.
Growth potential
U.S. cloud storage provider Backblaze is reportedly eyeing a $1 billion valuation as the company prepares to go public. As a result, investor interest in a potential Backblaze Initial Public Offering (IPO) will be high. The company has earned several industry accolades and boasts an enviable performance record compared to other technology IPOs over recent years.
The growth potential of an investment in Backblaze is further bolstered by the ongoing growth in popularity of cloud services and the increasing reliance businesses place on digital storage infrastructure for data management and security purposes.
Backblaze diversified its offerings in 2020 beyond just storing computer backups. It now provides customers with enterprise-level cloud storage for files, videos, music, images, documents and more using its “B2 Cloud Storage” platform. The service is easy to use with integration offered into many popular software applications used by individuals and businesses. In addition to its B2 Cloud Storage service, Backblaze offers a Managed Backup solution comprising comprehensive offsite data protection against ransomware attacks, malware infections and human error such as accidental file deletion.
On top of its impressive storage offering portfolio, Backblaze also operates an ever-growing network of availability centers across three continents housing more than 170 petabytes of user data stored tightly within their secure walls. Such widespread coverage provides users with reliable access to stored files regardless of their location around the world, making it ideal for global organizations needing multi-region storage solutions.
Given these factors, investors wanting exposure to the lucrative U.S one billion dollar cloud backup industry could benefit from considering a potential IPO from Backblaze – provided all regulatory requirements are met ahead of any proposed listing date.
Expansion into new markets
As a U.S. cloud storage provider, Backblaze has the potential to significantly increase its growth if it successfully expands into new markets. By going public, Backblaze will have access to capital that could be used to support its expansion efforts and in turn, offer more services worldwide. Expansion into new global markets will help Backblaze gain a greater share of the cloud storage market and potentially propel it towards its reported $1 billion valuation in an IPO.
Furthermore, by expanding into different geographical regions—such as Asia Pacific and Europe—Backblaze can increase its presence in international markets and ensure it isn’t limited to serving only U.S.-based customers. With strong international demand for cloud storage, this can be an especially lucrative opportunity for investors looking for potential revenue growth due to Backblaze’s expansion efforts overseas.
Acquisition opportunities
As a publicly-traded entity, Backblaze can take advantage of various acquisition opportunities. Being a U.S. cloud storage provider, Backblaze can participate in the fast-growing cloud computing market, opening doors to strategic acquisitions and partnerships. In addition, an IPO may provide the capital needed for a larger acquisition to further enhance the company’s market position and product offerings.
Furthermore, investment institutions are increasingly interested in new ways to diversify their portfolios by strategically investing in rapidly growing tech companies. With an estimated $1 billion Valuation after its IPO, investors may see a potential opportunity to gain access to not only Backblaze’s increasing valuation but also its dynamic portfolio of market-leading products and easily scalable services.
Overall, potential investors should evaluate each opportunity for risk management purposes. Any desired return on their investments must be weighed against the degree of risk before deciding on possible returns from such investment decisions.
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