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Mergers & Acquisitions

Canberra software startup Instaclustr is being acquired by Nasdaq-listed US tech giant NetApp

- April 8, 2022 3 MIN READ
Instaclustr
Instaclustr co-founders Adam Zegelin and Ben Bromhead
Canberra tech scaleup Instaclustr is being acquired by US software giant NetApp.

The terms of the deal have not been disclosed, but it’s believed to be worth more than $500 million.

The exit comes 9 years after the cloud-based Internet solutions platform was co-founded by Ben Bromhead, Adam Zegelin, Peter Lilley, and Doug Stuart ANU, which also backed the startup.  It now employs more than 300 people and is one of Canberra’s largest tech firms.

Instaclustr helps companies store and use large volumes of data to power their apps and products, including online streaming services, app stores, social media and ride-sharing companies.

The idea for the business came to Bromhead and Zegelin when they had an Apache Cassandra database for a project and found there was little information or assistance available for new users.

The exit is a major win for local seed investors including IOF, ASX-listed Bailador Technologies, and ANU Connect Ventures – a seed investment fund jointly owned by ANU and Spirit Super.

ANU Connect Ventures led the seed round in 2014, investing more than $8.5 million into the company since then.

The business raised $9.6 million in 2016 from the likes of Bailador and Our Innovation Fund (OIF), and then $20.8 million in 2018 in a round led by New York’s Level Equity.

Bailador’s (ASX:BTI) disclosure to the market provided some insight into the success of the sale, with the company saying it increase its carrying value in Instaclustr to A$118m, with an uplift of $54m. an increase of $0.38 NTA per share (pre-tax).

Managing Partner David Kirk said: “Instaclustr has been a standout performer in the Bailador portfolio since investment, and the sale of the company to NetApp represents a great outcome for both Bailador and Instaclustr shareholders.”

Bailador shares jumped around 17% on Friday.

Lilley, Instaclustr’s CEO, said data management platforms are increasingly essential companies looking for new ways to accelerate application development.

“Instaclustr’s growth has been driven by the fact that companies want to leverage open-source databases, pipelines, and workflow applications without overwhelming themselves with the complexity and cost of managing and operating them,” he said.

“We are excited for organisations building applications for their multi-cloud and hybrid cloud reality to benefit directly from Instaclustr’s data PaaS solutions along with NetApp and Spot by NetApp’s infrastructure solutions, while minimising operations burdens.”

ANU Vice-Chancellor Professor Brian Schmidt said NetApp’s acquisition of Instaclustr “transforms a local company into a global giant”.

“Today’s news is massive for ANU, it’s massive for Canberra, it’s massive for Australia and it’s massive for every university across our nation. Most of all, it is massive for Instaclustr,” he said.

“The acquisition of Instaclustr, which started out with some clever ideas in a co-working space on the ANU campus, by one of the world’s leading software companies demonstrates how our universities are creating the jobs, products and industries of tomorrow today.

“This is exactly the kind of innovation ANU is set up to deliver for Australia and the world and something we deliver day in, day out.”

Professor Schmidt said ANU was one of the first universities in the world to establish a VC fund.

“ANU Connect Ventures backed Instaclustr from day one and led the first few investment rounds in Instaclustr. Our willingness to invest first allowed other investors to back our judgement and invest alongside us.

“The returns to the University from this investment will now seed our new activities for years to come.”

OIF Ventures Partner Jerry Stesel said: “Having backed the founders and team at the Seed stage it has been an incredible journey to watch them execute flawlessly on their vision to be a globally leading technology business.”