Revolutionary CloudZero scores whopping $32M investment for cost-cutting solution!

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CloudZero Raises $32 Million in Series B Funding Round

CloudZero, a cloud cost management startup, has announced that it raised $32 million in a Series B funding round led by Innovius Capital and Threshold Ventures. With the new funding, the company’s total raised capital comes to over $52 million. The tranche will be used for expanding CloudZero’s platform and scaling its go-to-market efforts. CEO Phil Pergola says that the company’s focus will be on savings insights and self-service analytics.

Background

Erik Peterson co-founded CloudZero with Matt Manger almost ten years ago. The two innovators identified an “intrinsic” connection between efficient architecture and cost-effective cloud solutions. Every cloud engineering decision is a buying one, yet the cost conversation often bypasses the engineers who drive these decisions.

CloudZero’s Cost Management Solution

CloudZero provides engineering teams with cost data in a unified dashboard, combining the data with different types of business- and system-level telemetry. All this is laid on top of cloud billing data, allowing CloudZero to answer questions such as how much an individual product or feature costs. CloudZero’s tech relies on hourly cloud spend data to alert engineers of “abnormal” spend events (as identified by an AI algorithm). The platform ingests customers’ cloud, platform-as-service, and software-as-a-service spend to normalize it into a common data model.

Increase in Demand for Cloud Cost-Cutting Solutions

The COVID-19 pandemic accelerated digital transformation for many companies, which increased software development and spend in the public cloud. However, the broader slowdown in tech increased the focus on profitability and unit economics and drove a shift away from innovation at all costs. This shift has created a higher demand for cost-cutting cloud solutions. According to a recent IDC survey, 55% of cloud buyers believe inflationary pressures over the past few months have negatively impacted their return on investment. In fact, those organizations claim that the cloud now makes up on average 32% of their IT budgets. A quarter of respondents say they are looking internally at where they can make cloud cost reductions.

Competition in the Cloud Cost Optimization Market

CloudZero is not the only company providing cloud cost optimization solutions in the market. Other players include ProsperOps, Xonai, Vantage, Cast AI, and Zesty, along with larger vendors like VMware and Apptio.

Conclusion

The COVID-19 pandemic has made cloud cost-cutting solutions more important than ever. CloudZero’s platform provides engineering teams with a unified dashboard that combines cost data with different types of business- and system-level telemetry. CloudZero’s AI algorithm alerts engineers of abnormal spend events so that they can proactively address cost spikes to avoid cloud waste. With $32 million raised in its Series B funding round, various cost-cutting solutions in the market, and its 10x revenue growth increase since 2021, CloudZero will continue to strive to remain competitive and help businesses optimize their costs.

FAQs

What does CloudZero do?

CloudZero is a cloud cost management startup that provides engineering teams with a unified dashboard that combines cost data with different types of business- and system-level telemetry. CloudZero’s AI algorithm alerts engineers of abnormal spend events so that they can proactively address cost spikes to avoid cloud waste.