Wasabi Technologies lands $70M to expand no-egress cloud storage
Wasabi Technologies, a Boston-based cloud storage provider, has raised $70 million at a $1.8 billion valuation as it looks to scale its “no-egress” Hot Cloud Storage platform for data-intensive AI workloads. The round was led by L2 Point and strategic investor Pure Storage, underscoring growing investor interest in infrastructure that can reduce cloud costs as enterprises store and move larger volumes of data.
The financing comes as businesses increasingly complain about so-called hyperscaler “gotchas,” particularly high and often unpredictable egress fees—charges incurred when data is moved out of a cloud provider’s environment. With generative AI, analytics, and security workloads driving frequent data access and movement, those fees can become a major line item, especially for organizations that need to shift data between regions, clouds, and on-premises systems.
Positioning against hyperscaler pricing
Wasabi Technologies has built its pitch around a simpler pricing structure that aims to remove egress charges and reduce complexity. The company markets its storage as “hot,” meaning data is intended to be readily accessible rather than archived for infrequent retrieval. That distinction matters for AI and machine learning pipelines, where training, inference, and retrieval-augmented generation can require repeated reads and transfers across tools and environments.
While hyperscalers offer a range of storage tiers, customers often face tradeoffs between cost and accessibility, and can encounter additional fees for retrieval, API calls, or data transfer. Wasabi Technologies is betting that a straightforward model—paired with performance that meets modern application needs—will win customers that are reevaluating cloud spend.
Why AI is changing storage economics
The timing of the raise reflects a broader shift: AI is not only increasing the amount of data organizations keep, it is changing how often that data is accessed. Traditional backup and archive use cases tend to be write-heavy and read-light. AI workflows, by contrast, can be read-heavy, iterative, and distributed, putting pressure on storage performance and making transfer costs more visible.
Enterprises building AI applications are also more likely to adopt multi-cloud strategies or hybrid architectures, moving data between clouds or back to on-premises systems for compliance, latency, or cost reasons. In that environment, egress fees can act as a form of friction—or lock-in—making alternatives like Wasabi Technologies more attractive.
Strategic backing from Pure Storage
The participation of Pure Storage adds a strategic dimension to the round. As a major player in enterprise storage infrastructure, Pure Storage has a vested interest in how customers modernize data platforms across on-premises and cloud environments. Strategic investments can signal potential commercial collaboration, integration opportunities, or a shared go-to-market focus, particularly for customers balancing performance needs with cost control.
L2 Point leading the round also highlights continued venture appetite for infrastructure companies that can show clear differentiation in a crowded market. Cloud storage is highly competitive, but pricing transparency and predictability remain pain points—especially as data volumes surge.
What the funding will support
Wasabi Technologies said it will use the new capital to scale its Hot Cloud Storage platform, with an emphasis on supporting AI workloads. That typically implies investments in capacity expansion, performance optimization, and ecosystem integrations with data platforms, AI tooling, and security products.
As more organizations operationalize AI, they will need storage that can support high-throughput reads, frequent updates to datasets, and governance controls. Storage providers are increasingly expected to deliver not only raw capacity, but also reliability, observability, and compatibility with modern data stacks.
Competitive landscape and customer demand
The market for cloud storage includes hyperscalers, specialist providers, and hybrid offerings from established infrastructure vendors. Differentiation often hinges on pricing, performance, geographic availability, and integration with backup, disaster recovery, and data management tools.
Wasabi Technologies is targeting customers who feel squeezed by hyperscaler cost structures or who want leverage in cloud negotiations. For IT leaders, storage is frequently one of the largest and most persistent cloud expenses, and it can be difficult to optimize after data has accumulated. A provider promising no egress fees and “hot” access is effectively selling a hedge against future workload surprises.
Outlook
The $70 million raise at a $1.8 billion valuation positions Wasabi Technologies to compete more aggressively as AI-driven data growth accelerates. If the company can maintain performance while delivering the pricing predictability it promotes, it may benefit from a wave of enterprises looking to reduce cloud complexity and regain control over data movement costs.
For now, the round reflects a clear message from both investors and strategic partners: in the era of AI, storage economics—and especially egress fees—are becoming central to cloud decision-making.
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