Innovius Capital and Threshold Ventures led CloudZero’s $32 million Series B funding round. CEO Erik Peterson said the tranche would grow CloudZero’s platform and scale its go-to-market activities, focusing on savings insights and self-service analytics.
“The pandemic accelerated digital transformation for many companies, which increased software development and spending in the public cloud, while the broader tech slowdown increased the focus on profitability and unit economics and drove a shift away from innovation at all costs,” Peterson told TechCrunch in an email. CloudZero has profited from both developments and, with our new fundraising, is positioned to continue our expansion as demand for our platform is at an all-time high.”
Peterson co-founded CloudZero with Matt Manger about ten years ago after discovering an “intrinsic” link between efficient architecture and cost-effective cloud solutions. Every cloud engineering decision is a purchase decision, but engineers rarely discuss cost.
CloudZero gives engineering teams cost data and business- and system-level metrics in a single dashboard to address this. CloudZero uses cloud billing data to answer queries about product and feature prices.
CloudZero’s AI technology alerts engineers of “abnormal” cloud cost events using hourly cloud spend data. The platform normalizes cloud, platform, and software-as-a-service spending.
“Cloud adoption is now widespread across sectors, but digital businesses struggle with lack of visibility, control, and optimization of their cloud costs—which impacts their ability to manage cloud spending,” Peterson added. “With up-to-the-minute monitoring, our platform identifies cost drivers and anomalies instantly, enabling engineers to proactively address cost spikes or inefficiencies and avoid cloud waste.”
CloudZero’s platform is debatable. Cost-effective cloud solutions are needed.
55% of cloud buyers surveyed by IDC say inflationary pressures have hurt their ROI. Those firms estimate the cloud now accounts for 32% of their IT spending, and 25% are exploring internally for cloud cost reductions.
Given the enormous FinOps market opportunity, CloudZero isn’t alone in cloud cost optimization. ProsperOps, which optimizes cloud resources to save money, raised $72 million in February. Other players are VMware, Apptio, Xonai, Vantage, Cast AI, and Zesty.
CloudZero has 100+ clients. Since 2021, Peterson said revenue had surged 10x.
