Arik Hesseldahl

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Cloud Storage Start-Up Zetta Lands $9 Million Funding Round

Cloud-based storage and backup services are suddenly getting a lot of attention from venture capitalists. A few days ago we saw Backupify, which backs up data on social networks and Google Apps, land a $5 million round. Now there’s an enterprise-specific play that aims to use the cloud to replace those creaky old backup tapes that are still used surprisingly often.

The company is Zetta, and it will announce today that it has landed $9 million in a third round of funding from Foundation Capital and Sigma Partners.

So what does Zetta do? It offers small and medium-sized businesses offsite data protection.

“We’re not talking the huge guys, but the midsized guys,” CEO Ali Jenab told me. “Law firms with 10 to 200 employees, universities, all kinds of smaller health-care companies.”

Jenab says that companies are still creating 15 million tape backups a year. Zetta offers a replacement that instead backs up data to cloud-based infrastructure. Companies pay a monthly fee based on the amount of storage they use.

Large companies can usually handle this on their own, because they have their own data centers. “We’ve basically built the same kind of high-end infrastructure that the large companies use, and taken it to midmarkets,” he says.

Zetta built its own infrastructure that resides in data centers operated by Equinix; one in California, one in New Jersey. Customers have instant access to the backups and don’t have to operate any kind of gateway to get to it via a browser.

While this is the third round of funding that Zetta has taken, Jenab says it’s not a C round, but rather a continuation of an A round. The company has raised a total of $31.5 million in three installments, all from Foundation and Sigma. Zetta’s customers include a mixed bag of midsized organizations, including the town of Dedham, Mass.; Acupay, a tax management firm; and Plexus Management, a consulting firm.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik