Hightail, the file-sharing service formerly known as YouSendIt, is announcing today that it has raised $34 million in new funding. The round, which serves as Hightail’s Series E, was led by hard drive maker Western Digital.
This brings the total outside investment in the nine-year-old Hightail to $83 million.
That’s no small amount of cash, but it seems almost austere given Hightail’s handsomely funded competitors in the storage space: Dropbox has raised more than $250 million and is said to be in talks for much more, while Box has raised more than $300 million.
In an interview this week, Hightail CEO Brad Garlinghouse said the size and timing of the new funding round is in keeping with the company’s tradition — and how it thinks strategically about its future.
“It’s been almost 4 years since we last raised capital. We’ve been very judicious and very capital-aware in how we’ve grown the business, and we’ve always grown our revenues and our costs in lockstep,” he said. “We haven’t burned a lot of capital, and that’s something we’re proud of.”
However, now that Hightail is at the Series E stage, it’s reasonable to ask how the company plans to provide a return on its investors’ capital. When asked about this, Garlinghouse pointed to Hightail’s relatively modest fund raises as an asset that will allow the company to entertain both IPO and M&A scenarios.
“In the current environment, companies raise money at huge prices, and it limits their strategic availability,” Garlinghouse said. “I’ve been in the Valley for 17 years, and I have a slightly longer view. We’re building a company that will stand the test of time.”
In the near-term, however, Hightail says it’s focused on using its new capital to expand its reach in the enterprise market as well as growing internationally. Hightail currently has a staff of 230 employees, which it plans to expand in the months ahead. And in terms of how it plans to go up against its specific competitors Dropbox and Box, Garlinghouse says that Hightail is focused on having more distinct controls than the former, and more compatible with the currently dominant enterprise apps than the latter.
“We hear from customers that they have a ‘Dropbox problem’ in which they share a folder but all of a sudden it’s deleted because someone else had the access to control it. Those mistakes don’t happen with Hightail because of how we’ve managed version control,” Garlinghouse says. “And the biggest difference with Box, frankly, is that Box has really evangelized ‘the death of Microsoft,’ but some 90% of businesses today use Microsoft products. Hightail integrates into Sharepoint and Outlook… we complement Microsoft products, rather than say you have to rip them out and replace them.”
That all sounds logical, but there’s no denying that Hightail still has some catching up to do when it comes to getting market share and mindshare amongst a very competitive landscape of players who are all vying for the next-generation storage crown. But with a new name, a delineated strategy, and fresh funding, it’s clear that now is certainly not time to rule out Hightail as a contender.
Below you can watch my interview with Garlinghouse from this past July, when Hightail officially changed its name from YouSendIt: