May 12, 2011
By Ezra Brook, Editor at

On Thursday, May 12, 2011, online data backup service provider Carbonite, Inc., filed for an IPO saying that it hopes to raise roughly $100M in its offering. In a video interview (embedded below) by Andrew Warner of, Carbonite CEO, David Friend, explains how his company attracted over 1 million paying subscribers for his online backup service.

As of April 30, 2011, Carbonite had over 1 million paying customers in 100 countries, and 170 employees in Boston (plus others abroad).

Carbonite Revenue Growth
Carbonite was established in 2005, but launched its services in 2006. It has been growing exponentially for the past several years. However, the company is not yet profitable, nor would you expect it to be at these growth rates. Carbonite has a classic subscription model: they spend marketing dollars up front to acquire a customer, and then they reap the benefits over the lifetime of the customer. So, marketing expenses to acquire a customer all happen on day one, but revenue comes in over several years. Generally Accepted Accounting Principles (GAAP) only allows a company to recognize the current portion of the subscription revenue.

Here are Carbonite’s revenues:

  • 2006: $169,035
  • 2007: $4.0 Million
  • 2008: $8.2 Million
  • 2009: $19.1 Million
  • 2010: $38.6 Million
  • 2011: First three months revenue was $12.8 Million

Update Feb. 10, 2012: Carbonite reported a revenue of $60.5 Million for 2011

Carbonite is projected to bring in $50 Million in 2011. David Friend, Carbonite’s CEO, says that he believes the market for online backup has just been scratched and that the worldwide market is clearly big enough to warrant one or more standalone public companies in this space. He believes that most PCs and smart phones will eventually be backed up in the cloud.

Based on the 2009 revenue of 19.1 million and compared to its previous three years, Carbonite has been ranked #9 on the Inc 500 list with an impressive 11,207% growth rate. With such growth, Carbonite has been ranked as #1 in Boston and #1 in IT Services sector.

Based on yesterday’s Carbonite IPO filing, the ownership is structured as follows:

Owners Percentage of Ownership
Menlo Ventures 31.7
Performance Direct Investments 5.8
Crosslink Venture Partners 5.7
First Plaza Group Trust 5.4
David Friend, CEO 9.7
Jeff Flowers 8.3
Total 66.6

As evident from the ownership structure, 2/3 of the company is owned by investors and insiders. If as reported, Carbonite is looking to raise just only $100 million, does this make the valuation of the company to at least $300 million? Can’t wait to see the day Carbonite’s stock get traded with its catchy ticker symbol “CARB“.

(First 1:30 minute is an ad, then the interview is 58:02 minutes)

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