Cohesity, a data protection startup, has finalized its merger with Veritas’ enterprise data protection division, creating a unified company valued at $7 billion with a combined customer base of 12,000. Initially announced in February 2024, the deal valued Veritas’ data protection business at $3 billion. The new entity, which boasts an annual recurring revenue of $1.5 billion, is led by a management team comprising members from both Cohesity and Veritas, along with external executives.
The transaction was financed through a Series H funding round led by Haveli Investments, with contributions from Coatue, Sapphire Ventures, Dragon Fund, and others. Veritas’ data protection business is the only part included in the deal; Carlyle retains ownership of the remaining Veritas operations.
Cohesity’s CEO, Sanjay Poonen, revealed that his initial industry survey upon joining the company in 2022 highlighted fragmentation within the data protection sector. This insight shaped Cohesity’s interest in acquiring Veritas’ data business, as it shared Cohesity’s enterprise focus but had a distinct customer base. Poonen emphasized that the merger aims to create greater value, spur innovation, and consolidate the industry to reduce costs.
Post-merger, both companies’ product lines will continue to receive investments. Cohesity’s offerings will be complemented by Veritas’ flagship products, such as Veritas NetBackup and Veritas Alta. While Veritas branding will persist in regions where it is well-established, like Brazil, the go-to-market strategy will center on unified operations, with cross-trained sales teams promoting both product portfolios. This approach is expected to generate synergies and expand sales coverage without reducing headcount, as more sales representatives are needed to cover the broader market.
The merger benefits from minimal customer overlap—under 5%—allowing each company to introduce its products to the other’s customer base. Cohesity primarily serves the U.S., while Veritas has a stronger global presence. CFO Eric Brown highlighted that this complementarity ensures the combined business offers significantly enhanced value.
While the merger enhances Cohesity’s market position, potential risks of market consolidation, such as higher prices due to reduced competition, remain a concern. However, the company has no immediate plans to alter pricing or existing contracts. Poonen views the merger as a strategic step toward a future IPO, although no specific timeline has been disclosed. Cohesity had initially planned to go public in 2021 but postponed due to unfavorable market conditions.
Founded in 2013, Cohesity has raised nearly $1 billion from investors like Sequoia and SoftBank. Veritas, established in 1983 and acquired by Carlyle Group for $8 billion in 2015, brings decades of expertise to the newly formed entity. Poonen described the merger as a transformative moment in Cohesity’s history, positioning the company for significant growth, with a goal of reaching a $2 billion revenue run rate.