Backblaze cloud object storage company to go public

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DeMarcus Cousins ​​# 15 of the LA Clippers speaks with assistant coach Roy Rogers of the LA Clippers before the game in Game 6 of the 2021 NBA Playoff Western Conference Finals on June 30, 2021, at STAPLES Los Angeles Center.

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Backblaze, a company that backs up data on people’s computers and provides cloud-based storage space that businesses use to store and retrieve files, filed for publication on Nasdaq on Monday. The company intends to trade its shares under the symbol “BLZE”.

It’s not a big cloud company, but Backblaze has managed to grow in the shadow of much larger entities as more organizations are willing to rely on data center equipment they need. they don’t have it, in part because they can pay according to their use. . If Backblaze finalizes its initial public offering, it will join DigitalOcean to provide cloud capabilities to small businesses.

“The market demands alternatives to traditional and diverse public cloud providers for multiple reasons,” Backblaze said in its IPO prospectus. “These public cloud providers have increasingly focused on larger companies, resulting in significant complexity in their products and prices, leaving midsize companies behind.”

After its inception in 2007, Backblaze launched online backup services for PCs running MacOS from Apple and Microsoft Windows in 2008, and the company has grown by focusing on this one product. In 2016, the company entered the object storage market, competing against some of the world’s largest companies, including Amazon, Google, and Microsoft, which provide cloud computing services to businesses, schools, and governments.

Backblaze, based in San Mateo, Calif., Hasn’t really won over Amazon Web Services’ biggest cloud storage customers. However, Backblaze’s B2 cloud storage service has been adopted by some small organizations, such as US Public Television, Gladstone Nonprofit Institutes, and Kings County, California.

The Backblaze website reports that B2 service data storage costs 76% less than AWS S3 storage service, with 80% less data upload charges. Amazon S3 enjoys a gross margin percentage in the 1950s, according to an analyst estimate, while Backblaze, with its lower object storage price, has an overall gross margin of 50%.

Less than a third of Backblaze’s revenue comes from B2. But B2’s revenue grew 60% year-over-year in the first half of 2021, while online backup business grew 12% in the same period. Additionally, existing customers stick to B2 more consistently than backup, and B2 has a higher average annual revenue per user.

In September, Cloudflare, which offers a content delivery network used by businesses to quickly deliver content from data centers around the world, announced it would launch its own object storage service called R2.

Backblaze reported a loss of $ 2.4 million on second quarter revenue of $ 16.2 million. As revenue increased 24% from the last year quarter, the loss widened by $ 1.9 million. Prior to issuing $ 10 million in convertible notes as part of a private funding round in August, Backblaze had raised less than $ 3 million from outside investors. The company employed just 228 people at the end of the second quarter.

Oppenheimer and Co., William Blair and Raymond James are the principal underwriters of the initial public offering.

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