Exclusive: CloudZero raises $56M to tame cloud costs
CloudZero raised $56 million to help companies rein in soaring AI-driven cloud costs, CEO Phil Pergola tells Axios Pro.
Why it matters: Enterprises are struggling with exploding multicloud costs, especially as AI initiatives rapidly increase cloud usage.
Cloud infrastructure spending is expected to reach $2 trillion by 2030, driven by AI's rollout, according to Goldman Sachs Research.
How it works: CloudZero's platform helps engineering teams optimize their cloud and AI infrastructure costs, directly correlating cloud decisions to the business.
State of play: Strategics and investors alike are seeing the demand for products that may help contain their cloud costs.
In January, Flexera acquired NetApp's Spot financial operations product, to help customers "seeking to manage growing multi-cloud costs."
Last month, Cast AI Group, another finops startup that specializes in optimizing the efficiency of cloud-native environments, raised a $108 million Series C.
What they're saying:"Cloud spend is growing, that trend is not slowing down," Pergola says. "But companies are also very fixed on unit economics and making their business healthy."
Zoom in: The Series C round was led by BlueCrest Capital Management and Innovius Capital.
Other venture firms participating in the round included Matrix Partners, Threshold Ventures, Underscore VC and G20 Ventures. MongoDB also made a strategic investment in the round.
CloudZero closed at $32 million Series B fundraising round led by Innovius Capital and Threshold Ventures in June 2023.
What's next: Pergola says the company has enough cash after the new round to take it to profitability, but will not rule out a Series D down the line if the company wanted to "double down."
Bottom line: Expect more SaaS vendors to start buying — or developing — products they can put into their platform that offer cost visibility and optimization.
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