Sep 24, 2007

Wasatch Venture Fund Stands to Cash In on Mozy

Stacey Higginbotham

Salt Lake City, UT

There's just something about Utah. The blogosphere is abuzz over storage giant EMC Corp. reportedly buying Utah-based online storage startup Mozy for $76 million.

It's big news not only because this would push EMC from being an enterprise storage provider into the much smaller world of consumer-oriented online storage, but because Mozy has raised only $1.9 million. If the $76 million figure is true, that will generate some impressive returns for the firm's venture backers Wasatch Venture Fund, Tim Draper and Novell Inc. co-founder Drew Major.

The company behind Mozy, Berkeley Data Systems Inc., is based in American Fork, Utah. Its founder, Josh Coates, previously started the now defunct distributed online storage company Scale8 Inc. and participated in building storage for the Internet Archive, a nonprofit that takes snapshots of the Internet to preserve a record of each page in time.

Coates moved to Utah from California a few years ago and hooked up with Wasatch, where he refined his ideas around online storage for consumers. Together with Major, who is also in Utah, Wasatch brought in Draper to complete a $1.9 million seed round in May 2005. Wasatch is an affiliate fund of Draper Fisher Jurvetson.
 
Nick Efstratis, managing director at Wasatch, declined to comment on the Mozy news, but he says Wasatch isn't a stranger to exits. Efstratis says the fund has had 18 exits, including four initial public offerings, while noting that "only a handful" have exited after a single round of funding. The firm has three Wasatch venture funds and one government-guaranteed SBIC fund it manages for Zions First National Bank. In total Wasatch has $175 million under management and is currently investing from its $58 million Fund III. The firm focuses on investing in companies in Utah, Arizona, New Mexico, Colorado, Idaho, Oregon and Southern California.

An exit with such rich returns would be quite a coup for Wasatch, which is beginning to raise its fourth fund. - Stacey Higginbotham