Fidelity Backs AI Infrastructure Startup at $9 Billion-Plus Valuation
Vast Data, an AI software and storage startup backed by Nvidia, raised a new funding round led by Fidelity Investments and including participation of venture capital firms NEA and Bond. The round values Vast Data at more than $9 billion, people familiar with the matter said, compared to its valuation of $3.7 billion set in 2021.
Seven-year old Vast Data plans to use some of the proceeds of the fundraising to buy back stock from existing shareholders, the people said. The new shares that underpin the $9 billion valuation fetched a significantly higher price than the existing shares sold.
THE TAKEAWAY
• Vast Media raising money at valuation of more than $9 billion
• Company to use some proceeds to buy back stock
• Company expects to generate more than $100 million in revenue in 2023
Vast doesn’t need to raise money to fund its operations, Vast’s co-founder and CEO Renen Hallack said in an October interview.
Vast Data sells software to companies like Pixar, Verizon, and high-frequency traders to store data for AI applications. The 600-person company is one of a number of startups building digital or physical infrastructure for AI-focused apps that has gotten a lift from the rise of ChatGPT. Vast expects to pull in more than $100 million in revenue this year, more than triple last year’s sales, one of the people said.
Vast also sells software to a number of cloud computing providers including CoreWeave, which rent Nvidia’s graphics processing units to AI developers.
Vast has raised $280 million over the years from Norwest Venture Partners, 83North, General Atlantic, and other investors. “Nearly all of the money that we raised is just sitting in a bank account collecting interest,” Hallack said in an October interview.
Large mutual funds and other investors that invest heavily into the public markets, like Fidelity, have also stepped up startup investing in the area. Fidelity also backed CoreWeave, an upstart cloud computing provider that Nvidia also backed, Bloomberg reported this week. T. Rowe Price led a more than $500 million round this fall into Databricks, which allows companies to build their own AI applications.