In 2008, Marty Kagan, who previously worked at Cisco and Akamai, co-founded Cedexis, a company (now owned by Cisco) developing observability technology for content delivery networks. Another Cisco veteran, Hasan Alayli, joined Kagan at Cedexis in 2012 as a technical manager, and the two worked together for several years.
As Cedexis grew and began working with larger partners, each Kagan and Alayli became aware of the costs of data storage – and in particular the costs of storing data logs from services and infrastructure.
“The costs of storing logs, which were essential to our business, will be one of Cedexis’ largest expenses, after wages,” Kagan told TechCrunch. “This unsettling expense burden weighed heavily on our minds even as Hasan and I moved on to our next adventures.”
It’s not only Cedexis. This was demonstrated by a recent survey conducted by Wasabi, a cloud storage startup 53% of firms exceed their data storage budget in part because they use more power than planned. Ninety percent of firms that responded to the survey said they expect to increase their data storage budgets this 12 months.
So in 2018, looking to solve the log data cost problem they believed was affecting the entire industry, Kagan and Alayli teamed up to launch Hydrolix. Hydrolix is a streaming data lake platform that gives a repository of log data from various sources and mechanisms for delivering this data to applications in real time.
Kagan and Alayli seem to be reading the market well.
Hydrolix doubled revenue from the third quarter to the fourth quarter of 2023 and grew one other 75% in the first quarter of 2024, Kagan says. Annual recurring revenue is around $6 million, and the startup is attracting recent investment. This week, Hydrolix closed a $35 million Series B round led by S3 Ventures with participation from Nava Ventures, Wing Ventures, AV8 Ventures and Oregon Venture Fund, bringing the company’s total funding to $68 million.
“Because log data contains facts generated by companies, it is very valuable,” Kagan said. “And yet, because data is traditionally expensive to store and view, it is almost certainly data that shall be discarded after only a short time frame. Our data streaming platform combines real-time stream processing, decoupled storage, and low-latency indexed search to provide a powerful yet cost-effective log management system.
The Hydrolix platform supports “data-intensive” applications for security, observability, artificial intelligence and machine learning, and even promoting, marketing, travel and retail. Customers can run the platform on their very own cloud infrastructure or as a “data layer” to power pre-built applications developed by partners.
“All Hydrolix data is hot, eliminating the need to manage multiple layers of storage,” Kagan said. “This approach allows Hydrolix to offer its customers real-time query performance at the terabyte scale… Our software is applicable to a big selection of use cases that require each real-time evaluation of huge volumes of streaming logs and ad hoc evaluation across raw years data data.”
Hydrolix, which has about 90 corporate and public sector customers and employs about 60 people in Portland, Oregon, plans to proceed to expand. Encouraged by the Series B round, the company plans to scale up its sales and partner channels, in addition to divisions focused on marketing and customer onboarding.
“The outlook for acquisitions and pipeline expansion is good,” Kagan said. “In fact, our recent growth is one of the main reasons for interest in Series B.”