{"id":1665,"date":"2012-07-25T00:01:23","date_gmt":"2012-07-25T07:01:23","guid":{"rendered":"https:\/\/www.backblaze.com\/blog\/?p=1665"},"modified":"2021-08-13T07:22:01","modified_gmt":"2021-08-13T14:22:01","slug":"backblaze-raises-5-million-why-we-took-funding-after-5-years-of-bootstrapping","status":"publish","type":"post","link":"https:\/\/www.backblaze.com\/blog\/backblaze-raises-5-million-why-we-took-funding-after-5-years-of-bootstrapping\/","title":{"rendered":"Backblaze Raises $5 Million: Why We Took Funding after Five Years of Bootstrapping"},"content":{"rendered":"

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We started our online backup<\/a> service five years ago<\/a>, determined to help people never lose data<\/a> again. I\u2019m excited to announce that today we have a new partner, TMT Investments<\/a>, and some extra cash to help us achieve that goal!<\/p>\n

This is awesome news for our customers who have come to rely on our service and for the millions of people who need an online backup service<\/a> like ours. Oh, and it\u2019s pretty fantastic for us too.<\/p>\n

I wanted to spend a few minutes taking you through the process of how we got here. Backblaze is already profitable and growing quite quickly, so you may ask, \u201cWhy take funding now?\u201d It\u2019s a good question, so let\u2019s start at the beginning\u2026<\/p>\n

Backblaze at the Beginning: Bootstrapping<\/h2>\n

When we originally started Backblaze, we wanted to focus on building the business\u2014not on raising funding. We were worried funding would influence the direction of our product and the culture of the company. We also didn\u2019t want to give away control and a large part of the company.<\/p>\n

Thus, we decided to bootstrap. What that looked like was five people committing to a year without salary and putting some of our own money into the business.<\/p>\n

Typically companies grow while losing money and raise VC funding as an operational requirement. Without funding, there were certainly some lean years<\/a> for us in the beginning! In fact, an online backup service may have been the craziest business to bootstrap. It turns out that it is incredibly capital intensive to build 40 petabytes<\/a> of storage, even using our cost-efficient cloud storage<\/a>. However, we were committed to helping people backup data, were innovative about reducing the cost of storage, went without salaries for a while, pinched pennies where possible, and found our way through the wormhole to a fast-growing and profitable company a couple of years ago.<\/p>\n

Considering Funding<\/h2>\n

While we chose not to raise funding to start Backblaze, we decided we would re-evaluate our decision to bootstrap every six months to make sure this was still the right path. There were certainly a number of companies interested in giving us funding, but we continually decided it was better for us to go without.<\/p>\n

About six months ago we had one of these discussions and for the first time said, \u201cHmm, it might be an interesting time to raise funding.\u201d There were several reasons why we decided it may finally be the right time:<\/p>\n