Bailador Case Study: Instaclustr
Founded in Canberra in 2013 by co-founders Ben Bromhead and Adam Zegelin, Instalustr stemmed from the realisation there was no quality managed support provider for Apache Cassandra, a leading NoSQL, open-source database.
Fast forward to 2017 and Instaclustr has been selected for the Australian Financial Review Fast Starters 2017 and named a finalist in the Deloitte Fast 50.
The arrival of Web 2.0 has seen an explosion in the amount of data companies need to collect and store. As traditional databases were designed before Web 2.0, a new database architecture was required, and NoSQL databases were developed to allow for more efficient scaling.
Apache Cassandra is among the most popular NoSQL database with users including Apple, Netflix, Spotify and Walmart. Cassandra is powerful, but can be technically challenging to manage. Most companies lack the resources or the expertise to handle it in-house – which is where Instaclustr comes in.
Instaclustr removes the pain of designing, installing, configuring, managing and scaling the database, so the customer is free to focus on building its core products and applications.
Bailador invested in Instaclustr in 2016 following an introduction through Bailador’s network.
Michael Hayes, Investment Manager at Bailador, talks about the decision to invest in Instaclustr: “We took the time to research the NoSQL industry and really understand the trends, market dynamics and competitive landscape.
“The more research we conducted, and the more we got to know the team, the more we became excited about the potential of NoSQL databases – in particular, Apache Cassandra – and we believed Instaclustr was extremely well positioned to capitalise on a large addressable market being driven by the growth in big data.”
After initially focusing on small business customers, Instaclustr quickly expanded its client base to larger enterprise customers as its capabilities grew; Instaclustr is now providing fully managed solutions for companies such as Atlassian, Sonos, Adstage and Campaign Monitor.
Delivering year-on-year revenue growth of over 100% with strengthening unit economics, Instaclustr generates more than 90% of its revenue outside Australia. It also partners with Systems Integrators, such as Accenture and IBM, to address the data management needs of the global enterprise market.
Instaclustr’s Technology Operations centre remains in Canberra. However its global headquarters is located in Palo Alto, California, where Ben and Adam are now based alongside CEO Peter Nichol, a very well credentialed software executive who joined the company 2.5 years ago. It is likely that the company will continue to expand its footprint internationally to better serve its global customer base.
Doug Stuart, CMO at Instaclustr, said there are many advantages to Open Source software: “Enterprises are now turning to Open Source solutions for at-scale deployments. Open Source brings the power of the community to the continued development and maintenance of the technology, delivering thousands of smart minds to solve problems. Transparency with no vendor lock-in helps an organisation to address operational and technology risks when deploying mission-critical applications.”
Andrea Kowalski, Principal at Bailador, sits on Instaclustr’s board and recently relocated to the US to support Bailador’s US portfolio and is enthusiastic about Instaclustr’s future. She said: “We’ve been really impressed with the tremendous progress the company has made since we invested a year ago. The next step for Instaclustr is to leverage their expertise in managing Apache Cassandra into managing complimentary Open Source technologies such as Apache Spark and Apache Kafka, to ultimately provide a ‘one-stop-shop’ for managing a customer’s Open Source data processing and storage needs. Instaclustr has evolved from being a ‘Database-as-a-Service’ provider to being an ‘Open-Source-as-a-Service’ provider – we expect this evolution to drive significant growth for the company.”
She said: “Further, the company’s addressable market has proven to be significantly larger than first estimated as more and more companies execute on what’s known as ‘Polyglot Persistence’, which means a company will use multiple data storage technologies for different applications. Why this is relevant for Instaclustr: an enterprise company does not need to make a complete switch from traditional databases. Instead it can do so application-by-application, swiftly unlocking new customer potential.