Arik Hesseldahl

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Fresh Off Rebranding Effort, Hightail Lands $34 Million in New Funding

moneybagsIt has been just three months since the once email-centric file-sharing service YouSendIt changed its name to Hightail, but it sure feels like longer. When I spoke with him yesterday, CEO Brad Garlinghouse felt the same way. It has just been that kind of year for the company.

A new mission brought with it a new name that’s intended to better reflect everything the company can do. And now there are new investors, too.

Hightail said Tuesday it has raised a $34 million Series E led by Western Digital Capital, the investment arm of Western Digital, the hard drive manufacturer. Accolade Partners is also a new investor. Previous investors Alloy Ventures, Sevin Rosen, Emergence Capital, Adams Street Partners and Sigma Partners also participated.

It’s the first new funding for Hightail since 2010, when it raised $15 million in a D round, and it brings its total capital raised to nearly $83 million. During most of that time, the company hasn’t been hurting for money, running on cash from its operations.

So how has business been since the name change? “Candidly, we were very apprehensive about the change. But within a month we saw traffic and activity up,” Garlinghouse told AllThingsD.

One reason for the new funding is expansion in international markets. Hightail recently opened offices in London and in Australia, and has been working furiously to localize its service for markets in Europe. In just the last month it has completed new versions in German, Spanish and Italian.

Hightail has also been quietly acquisitive. In September it acquired adeptCloud, a file-sharing and collaboration outfit that focuses on privacy. “They do some very clever things around key management and document control and watermarking,” Garlinghouse said. “There’s a lot more interest in privacy now. It’s the Edward Snowden effect.”

That’s on top of Found, a cloud-searching service Hightail acquired in January.

In its previous incarnation, YouSendIt, Hightail had built up a trusted brand name. It boasted a user base of 43 million people — free and paid combined — using its service in 193 countries and pretty much all of the Fortune 500.

File sharing is a tough space in which to compete. DropBox, Box and Microsoft’s SkyDrive are all fighting for the same enterprise users that Hightail is going after. But Garlinghouse’s hope is that Hightail’s historic relationship with a lot of those same corporate users will turn out to be an advantage.

There’s also more to it than storage. Garlinghouse is hoping that large companies will pay for enhanced services like access control, extra security and activity logs. “Anyone can offer file storage in the cloud,” he said. “Our way of differentiating is what you can do with those files after you’ve uploaded them in the cloud.”


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