In 2008, Marty Kagan, who previously worked at Cisco and Akamai, co-founded Cedexis, a company (now owned by Cisco) that develops observability technology for content delivery networks. Fellow Cisco veteran Hasan Alayli joined Kagan at Cedexis in 2012 as a technical lead, and the two worked together for several years.
As Cedexis grew and began working with larger and larger partners, both Kagan and Alayli became acutely aware of the cost of data storage — and specifically the cost of storing data logs from services and infrastructure.
“The expense of storing the logs that were necessary for our business would be one of Cedexis’ largest expenses, second only to payroll,” Kagan told TechCrunch. “This alarming cost burden weighed heavily on our minds, even after Hassan and I moved on to our next adventures.”
It’s not just Cedexis. A recent poll by Wasabi, a cloud data storage startup, found that 53% of companies exceed their storage budget partly because they are using more capacity than planned. Ninety percent of companies responding to the survey said they expect to increase their storage budgets at some point this year.
So in 2018, trying to address a logging data cost problem they were seeing across the industry, Kagan and Alayli joined forces to launch Hydrolix. Hydrolix is a “streaming data lake” platform that provides a repository of log data from various sources and mechanisms for delivering that data to real-time applications.
Kagan and Alayli read the market well, it seems.
Hydrolix doubled revenue from the third quarter to the fourth quarter of 2023 and grew 75% in the first quarter of 2024, Kagan says. Annual recurring revenue is around $6 million and the startup is attracting new investment. This week, Hydrolix closed a $35 million Series B round led by S3 Ventures with participation from Nava Ventures, Wing Ventures, AV8 Ventures and the Oregon Venture Fund, bringing the company’s total to $68 million.
“Because log data contains the data that businesses create, it is extremely valuable,” Kagan said. “And yet, because it has traditionally been expensive to store and search, it is the data that is most likely to be discarded after a short period of time. Our streaming data lake platform combines real-time streaming processing, disconnected storage, and low-latency index lookup to deliver a high-performance yet cost-effective log management system.
Hydrolix’s platform powers “data-intensive” applications for security, observability, artificial intelligence and machine learning, and even advertising, marketing, travel and retail. Customers can run the platform on their own cloud infrastructure or as a “data layer” to power pre-built applications designed by partners.
“All Hydrolix data is ‘hot,’ eliminating the need to manage multiple tiers of storage,” Kagan said. “This approach allows Hydrolix to offer its customers real-time query performance at terabyte scale… Our software is applicable to a wide range of use cases that require real-time analysis of high-volume streaming logs and ad hoc analysis over many years raw data.”
Hydrolix, which has about 90 customers across the enterprise and public sectors and a Portland, Oregon-based workforce of about 60 people, has further expansion in mind. Bolstered by the Series B, the company plans to scale its sales and partner channel operations, as well as its segments focused on marketing and customer onboarding.
“Looking ahead for pipeline acquisition and expansion deals is strong,” Kagan said. “In fact, our recent growth is one of the main reasons driving interest in Series B.”
