By Greg Avery Reporter, Denver Business Journal
Faction, a Denver company that sells cloud computing infrastructure services, raised $18 million in equity funding from investors and plans to add dozens of jobs and expand internationally.
New investor River Cities Capital, based in Cincinnati, led Faction’s Series B round, which closed last week and was announced Thursday. Also new in the round was Dell Technologies Capital, the investment arm of Dell Computers.
Faction’s existing backers — Denver-based MeritageFunds, and growth equity firms Sweetwater Capital and Charterhouse Strategic Partners — participated in the new funding.
“It’s going to allow us to invest in more people,” said Dan Grote, Faction CFO. “Our goal is to be between 80 and 100 people in the next 12 months — to double in size over the next year.”
The large majority of the 50-employee company’s new hires will be at Faction’s Denver headquarters, where all but a few of its workers are today, he said.
Faction provides cloud computing infrastructure and services to other companies, houses client data on Faction servers and manages client’s use of cloud computing platforms such as Amazon Web Services, Microsoft Azure, Google and others.
Faction has computer servers in data centers at seven U.S. sites, locations chosen for their low-latency data links to nearby Amazon Web Services locations.
Its “multi-cloud platform-as-a-service” offering lets clients use different cloud providers for different software applications, giving them the ability to choose the best-priced and optimal cloud services for different software applications, Grote said.
“This growth capital is validation that Faction is providing and developing groundbreaking technology in the cloud industry,” said Luke Norris, founder and CEO at Faction, in a statement. “We are ecstatic to partner with great investors who share our vision of a multi-cloud future and are uniquely positioned to help us realize that future today.”
About 60 percent of the jobs Faction plans to add will be technology engineering and product development, with the remaining 40 percent being in sales and marketing and business functions, Grote said.
Faction will open a London office by this summer and is planning to add an office in Asia, likely in Singapore, within a year, Grote said.
Its overseas expansion is driven by demand from U.S. clients that operate internationally or plan to, Grote said.
“We just haven’t had the funds to do that as quickly as our customers would like,” he said. “Now we have the capability to get there. Our customers are extremely excited with where we’re going.”
It has been working in partnership with cloud technology company VMware to offer its cloud services on Amazon Web Services.
“We’re impressed with the depth and breadth of the company’s solutions for enabling managed services partners and are particularly encouraged by their innovative offerings for cloud connected storage, including VMware Cloud on AWS,” said Rob Heimann, managing director at River Cities Capital Funds, in a written statement.
Heimann is joining the Faction board of directors.
Faction used to do business under the name Peak, and Peak Colo, prior to changing its name in 2015.