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September 23, 2007

Breaking: Online Backup Startup Mozy Acquired By EMC For $76 million

Michael Arrington

60 comments »

Online storage startup Mozy, headquartered in Utah, has been acquired by EMC Corporation, a public storage company with a nearly $40 billion market cap. EMC paid $76 million for the company, according to two sources close to the deal.

We first covered Mozy in January 2006 as part of an overview of the current generation of online storage solutions. The company has a dead simple way for users to back up their computer hard drives online. Download their software (Mozy supports both Windows and Mac machines) and the backups occur slowly over time. If there is ever a problem, you can restore your hard drive from Mozy’s servers.

Mozy’s chief competitor is Carbonite, another company we’ve tracked over the last couple of years. Carbonite has raised $21 million in venture financing.

Mozy, by contrast, raised just $1.9 million in capital. The round, closed in May 2005, was led by Wasatch Ventures, with participation from Tim Draper and Novell co-founder Drew Major.

That’s quite an exit for Mozy - $76 million on just $1.9 million raised. It’s almost identical to StumbleUpon, which was acquired by eBay earlier this year for $75 million after raising just $1.5 million in venture capital.

Rumors circulated a year ago that Mozy was close to being acquired by Google for significantly less than this. The company eventually passed on the deal, which must have been a tough call. They clearly made the right choice in waiting.

Look for an official announcement of the Mozy acquisition in the next few weeks. Congratulations to Josh Coates, Mozy’s CEO (who refuses to comment on the deal), and the rest of the Mozy team.

  • Sphere It

This entry was posted on Sunday, September 23rd, 2007 at 2:41 pm and is filed under Company & Product Profiles. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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Comments

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  1. Mik

    September 23rd, 2007 at 3:01 pm

    too bad the mozy service is so unreliable that it makes it useless as a viable backup service …

  2. rc

    September 23rd, 2007 at 3:03 pm

    well done for mozy
    emc are the biggest

    rc

    trading tennis blog

  3. John Mills

    September 23rd, 2007 at 3:03 pm

    Mozy is a nice one, but I use box.net frequently, I think it’s even simpler.

  4. Bob Warfield

    September 23rd, 2007 at 3:12 pm

    Congratulations Mozy guys, you’re rich! Now where the *&%@? is my data?

    http://smoothspan.wordpress.co.....s-my-data/

    Best,

    BW

  5. Warren

    September 23rd, 2007 at 3:20 pm

    EMC made a smart move. I hope they don’t mess it up because mozy is an incredibly good service.

    Way to go MOZY!!! (BTW - thanks for saving my ass last month!!! Your service works like a charm.)

  6. * MISS UNIVERSE

    September 23rd, 2007 at 3:29 pm

    It would be interesting to find out WHICH startup Google will choose, if in fact they did negotiate with Mozy but were rejected.

    It must have been a one sided deal for them to reject Google, if the rumor is true.

  7. Harding Bueller

    September 23rd, 2007 at 3:33 pm

    TIME magazine ranked them #1 - now we know why.

    The guys at Mozy are one of the best groups I’ve worked with. Hey man, no service is perfect - but these guys are making money and have totally changed the backup industry.

    Again, congrats Mozy guys. Keep up the good work on your service.

  8. Canye

    September 23rd, 2007 at 3:36 pm

    Good for Mozy and a great return for their investors!

    Check out another of their competitors called ElephantDrive - http://www.elephantdrive.com

    This types of services are just starting to take off with consumers and I’m sure there will be several other players that will have in exit in the next 12 months.

  9. anonymouse

    September 23rd, 2007 at 3:43 pm

    Great company, great service. We run all our PC backups on them (wish the Mac client worked properly!).

    Congrats to the team. Hope it means strength to strength for them :)

  10. Elijah Luke

    September 23rd, 2007 at 3:49 pm

    I’ve used Mozy myself and it works well. Nice to know the service is sticking around for a while.

  11. bobd

    September 23rd, 2007 at 4:09 pm

    The service has been working great for me. I had a hd failure on my windows machine and got all my stuff back. I did try to restore some stuff on my mac and there was a delay in getting that… but I got it.. (the mac service is still in beta, so I guess I can be somewhat understanding..)

  12. Barfer

    September 23rd, 2007 at 4:31 pm

    I’ve been using the mac mozy since it came out on two different machines and have over 160 gigs backed up. It saved my ass bigtime. I hope EMC doesn’t screw it up.

  13. mark

    September 23rd, 2007 at 4:32 pm

    Wow, that’s an awesome payout to Mozy. Good work!

  14. jondo

    September 23rd, 2007 at 4:34 pm

    Mozy’s 2GB free backup is great.

    Click this link for extra 256MB
    https://mozy.com/?code=PPY7TH

  15. Nat Turner

    September 23rd, 2007 at 4:43 pm

    Wow - congrats to the Mozy team.

  16. Anne Mackenzie

    September 23rd, 2007 at 4:44 pm

    Way to go Mozy! I’m a huge fan of the service and I don’t think this could have happened to a better company. I’ve been using Mozy to backup my laptop for over a year and have been been really happy with how “dead simple” (as Mike put it) the service is. A co-worker had a hard drive crash a few weeks ago and with the help of Mozy technical support was able to restore everything within 24 hours.

    Last I heard they had half a million users, so I guess it was only a matter time before someone bought them up?

  17. phenom

    September 23rd, 2007 at 4:46 pm

    Mozy is great. I hope they continue providing free 2Gb backup storeage.
    http://vidsonly.blogspot.com

  18. John Wiseman

    September 23rd, 2007 at 5:09 pm

    For those of you considering online backup, you should read this:

    Berkeley Data Systems (Mozy) may disclose Personal Data, including the data you back up with the Service, with or without notice (a) if required by a subpoena or other judicial or administrative order, (b) where required by law, or (c) at our sole discretion, where we deem it necessary to protect the safety of any individual or the general public or to prevent violation of our User Agreement or the rights of Berkeley Data Systems or any third party.

  19. Don Wilson

    September 23rd, 2007 at 5:46 pm

    Never heard of them, but nice job!

  20. Zoli Erdos

    September 23rd, 2007 at 5:49 pm

    @19 John,

    If you use your own encryption key, it does not matter what judge orders what, no-one can access your data :-)

  21. John Wiseman

    September 23rd, 2007 at 6:09 pm

    @21 Zoli

    How is it possible to use my own encryption key in conjunction with Mozy?

  22. Fabian Schonholz

    September 23rd, 2007 at 6:24 pm

    I tried Mozy couple of months ago and I was VERY disappointed. But congratulation to them for a well executed exit.

  23. Jonathan

    September 23rd, 2007 at 6:26 pm

    The question for me is why would Google have wanted them? Do they not have their own solution (GDrive / Platypus) already in the works?

  24. Steve

    September 23rd, 2007 at 6:47 pm

    Carbonite would have been the one to acquire—much simpler, more elegant solution with a more robust backend. Also, they have more of a global presence already. Microsoft, Google, and Yahoo! will all need to be in this business, and I would not be surprised to see Symantec and the other security companies getting involved as well. Secure online backup for consumers and small businesses is a huge market.

  25. lawrence

    September 23rd, 2007 at 6:50 pm

    good for Mozy and their big payday.
    that’s quite a handsome payday indeed, 37:1 ratio

  26. Steve Ballmer

    September 23rd, 2007 at 7:12 pm

    Mozy, why would you name a backup company Mozy?
    Should be named Hurry, Rapid, Quickly, Rush… not Mozy!
    Sheese!
    http://fakesteveballmer.blogsp.....night.html

  27. Avinash

    September 23rd, 2007 at 7:13 pm

    Smart move by EMC. Congrats John.

  28. old sk00l storage dude

    September 23rd, 2007 at 7:27 pm

    Steve - I’m guessing EMC bought Mozy because EMC is a technology company and Mozy kicks Carbonite’s a$$ in that department. Carbonite may promote their software as “simple” but thats just an excuse for “our engineers suck”. You mention carbonite having a “robust backend” but rumor has it they use tape. Tape was awesome technology.. back in the 80’s.

    Welcome to the big leagues Mozy :)

  29. Vinny the wanna-be scooper

    September 23rd, 2007 at 8:19 pm

    Uh, I was gonna try and scoop this once I had confirmed it. I heard from someone, who heard from someone, and so on. (VC rumor mill stuff.) Anyhow, congrats to you (MA) on the scoop. I’m a huge TC fan and you were the ones that introduced me to Mozy. I’ve been a Mozy user at home ever since and it has been solid. Wish my company would get a clue. Welcome to the B2C space Joe T & co. And hopefully my smallish company isn’t so small that you’ll ignore us.

  30. Shawnita

    September 23rd, 2007 at 8:36 pm

    Wow! $76 million sounds like a lot of money!! I have been a Mozy user for almost a year now. Luckily, I have never needed to restore my data but I know people who have. Mozy worked great for them. Technology always has bugs, no matter what company it is, but I think Mozy has done a great job recovering from those bugs. I will continue to save all my data, including my very valuables pictures with them!

  31. jlm

    September 23rd, 2007 at 8:55 pm

    if this is true it is not only huge for mozy, but huge for emc. could be another vmw move . . . jlm

  32. Tristan Rhodes

    September 23rd, 2007 at 8:55 pm

    I use Mozy on my Windows machine and have been happy with it.

    If they would create a Linux client then I would be even more happy.

    Perhaps EMC will work on creating a new Linux client for Mozy.

  33. DOUGman

    September 23rd, 2007 at 10:00 pm

    I spoke with one of their reps and I asked them about a Linux client, she told me that they are considering it.

    D.

  34. Startup News

    September 23rd, 2007 at 10:49 pm

    The Founder is only 33 but how does the company make money .. They charge very little … I mean How . Like , how do they do it ?

    http://www.technologyreview.co.....p;TRID=245

  35. Alex

    September 23rd, 2007 at 11:44 pm

    Looks like a bargain next to Seagate’s acquisition of eVault last December for $185M

  36. Matt

    September 24th, 2007 at 1:00 am

    @Mik,

    I have been using Mozy since it first started up and have had no problems whatsoever with it. What problems have you had?

  37. Jim

    September 24th, 2007 at 5:13 am

    For Linux (and Mac, and Windows) check out Jungle Disk - http://www.jungledisk.com - it lets you use the Amazon S3 storage service for unlimited backup at only $0.15 per gig. Rumor has it they are working on a version for GDrive as well.

  38. Carlos

    September 24th, 2007 at 5:15 am

    Well, i am speechless, if Mozy worth 76 million then how much esnips.com, box.net , orbitfiles.com worth? lol

    i may be wrong but 76mil is toooo much, but lets salute mozy.com guys, they made it :)

  39. David Armstrong

    September 24th, 2007 at 5:45 am

    I’ve had the chance to be mentored and guided by Josh over the last few years. He’s a solid person and its inspiring to know that doing it right can produce results, both in product loyalty and exit price.

  40. Jason Alba

    September 24th, 2007 at 5:53 am

    This is awesome, I’ve been using Mozy for months now with no problems, and it provides great peace of mind.

    Jason Alba
    CEO - JibberJobber.com

  41. rpp

    September 24th, 2007 at 7:45 am

    Hey,
    I am big time user of Mozy.. its neat.. unintrusive and coolest service I have seen :) Way to go Mozy :)

  42. Dov Sugarman

    September 24th, 2007 at 11:40 am

    That is great news for Mozy!

    I wanted to let you know about another cool new backup program that offers UNLIMITED and FREE backup.

    With Zoogmo you control where your files are backed up by building a backup network of your own or your friends’ computers.

    Zoogmo automatically backs up ALL of your data over the internet, using a combination of Triple-DES and AES 256 encryption to make sure that only you have access to your files.

    Check out Zoogmo at http://www.zoogmo.com to learn more and begin turning your social network into your backup network.

    Remember, with Zoogmo you have no annoying monthly fees - totally free unlimited backup you can trust!

  43. tickler

    September 25th, 2007 at 8:47 am

    This is a typical bonehead move by a large corporation.

    They see Google and MS and everyone else getting in with their own technology and think buying a new startup is the way to go.

    Problem is that Mozy pays it’s users to use their backup service. This works as long as you have venture capital. When it runs out, you are out of luck.

    EMC will now need deep pockets to keep this service going, and they will get no gain from it.

    I don’t think EMC understands the economics of online backup. They are just following the crowd. Sell your EMC stock!

  44. Erich

    September 26th, 2007 at 1:17 pm

    Fubario is another “back up to your friends” option for those of us who don’t want to hand our data over to the mystery cloud in the sky, as well as to avoid paying a subscription fee every month/year. ($60 a year for mozy?)

    Fubario is also cross-platform and will happily back up Macs to PCs and vice versa. Linux is still being tested…

    http://fubario.com

  45. Alex

    September 26th, 2007 at 2:38 pm

    As people mentioned here, Mozy is indeed extremely unreliable. Granted that a year ago Mozy may have been your best choice, but the latest online backup service copmanies such as DigiSense, JungleDrive and BeInSync take advantage of the Amazon storage services and therefore deliver a much more reliable backup at a lower cost!

  46. Rich T.

    September 26th, 2007 at 11:02 pm

    Tickler #43 - You think EMC bought Mozy because Mozy pays for it’s customers to use its service? Are you stupid??

    How did Mozy only raise $1.9 million in venture capital over 2 years ago and survive all this time if they paid for their customers or were just a Venture Capital money burning machine??

    Duh. Obviously their business is working - they’ve been making big money on this and it’s allowed them to grow big - EMC wanted in on it.

    YAY MOZY!!

  47. Vulture Capital

    September 27th, 2007 at 7:25 am

    I love reading the astroturf in these posts from the other storage startups. “Mozy sucks” “EMC is stupid” blah, blah, blah… hilarious.

    You idiots should be happy that a $40 billion giant has validated this space for you once again. Your chances of getting an investor to dump another $50 million into your black hole just went up 10x.

  48. B

    October 4th, 2007 at 6:48 am

    My guess is EMC bought the company for these reasons : (this is from Josh in an interview with TechRockies) Looks like Josh and his engineers created some custom code for data protection.

    “We don’t buy storage systems, we buy disks. We’ve done the architecture of the storage system all ourselves, because a petabyte is not something you can just buy. We needed to design it in an economic way. A lot of the technology we have uses a special type of encoding to keep the data safe. You can’t use a RAID system because of the probability of permanent data loss with traditional encoding. Our proprietary method of encoding the data is very custom and all aimed at one very specific problem, the remote backup problem.”

  49. Mark

    October 5th, 2007 at 8:11 pm

    Wow, Mozy really did it! Congrats. It’s nice to see hard work paying off. I hope it does for my favorite website, http://www.couponcowgirl.com. True on evault.com, that’s nuts too.

  50. James Raehl

    October 11th, 2007 at 1:44 am

    Mozy’s backup service IMHO works fine, although incredibly slow compared to XDrive filesharing service.

    However, it appears from my experience that your Mozy login is tied to a specific hard disk and operating system on that disk. If either change (disk crash or rebuilt OS), you lose your current payment. I’d only recommend monthly billing, and be careful to change to that from the default 2 years when setting up the billing. Whatever billing period you choose, is what you are stuck with for renewals in that account. Their billing needs a lot of work.

  51. Craig

    October 14th, 2007 at 7:26 am

    I maintain an online backup review website. Please take a look there:
    http://backupreview.googlepages.com/default.html

    Online backup business is getting hotter, but a lot of companies won’t survive. See which companies have the best future.

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