CloudZero raises $32 million in Series B funding
CloudZero raises $32 million in Series B funding from Innovius Capital and Threshold Ventures. CloudZero’s total capital raised is $52 focusing on scaling go-to-market initiatives, expanding the platform, and focusing on savings ideas and self-service business intelligence.
Pergola explains that the pandemic accelerated digital transformation, resulting in higher software development and cloud platform spending. The tech downturn shifted focus to revenue and unit economics, reducing advancement efforts. CloudZero has capitalized on these trends, with a recent funding round quick progress.
Erik Peterson and Matt Manger co-founded CloudZero ten years ago, focusing on the intrinsic link between effective architecture and affordable cloud solutions. They believe every engineering decision is a purchasing decision, often excluding engineers. CloudZero provides engineering teams with a unified dashboard that combines cost data with business and system-level telemetry. This information is combined with cloud billing information, enabling CloudZero to respond to inquiries about product or feature costs.
“Despite the existence of first-generation cloud cost management solutions, the number one pain for FinOps professionals is consistently getting engineers to take action,” said Phil Pergola, CEO of CloudZero.
Pergola noted that digital businesses struggle with cloud costs, affecting their capacity to control spending. The platform detects cost drivers and anomalies with up-to-the-minute monitoring, enabling engineers to prevent waste by proactively addressing cost spikes or inefficiencies.
An IDC survey found that 55% of cloud buyers believe rising prices negatively impact their return on investment. Cloud now accounts for 32% of IT budgets, and 25% are looking for ways to lower costs internally. CloudZero and ProsperOps are among the cloud service providers cost optimization market, with ProsperOps shuttering a $72 million investment in February. Other distributors include VMware, Apptio, Xonai, Vantage, Cast AI, and Zesty.
Justin Moore, Investor and board advisor of CloudZero said, “Effective cloud cost management has long been a missing piece in the software development lifecycle, and in 2022 it became clear to us that the macro environment would force companies to scrutinize their spend and prioritize cost optimization.”
More than 100 people use CloudZero. Pergola refused to reveal revenue but claimed it had grown tenfold since 2021.