Zaloni provides software and services that help leverage big data in order to reduce costs, add new streams of revenue, and reduce risk in their organizations. Zaloni serves primarily the Fortune 500 and has helped build big data implementations at many of the world’s leading companies such as Verizon, American Express, United Healthcare Group and NBC.

In February 2016, Zaloni closed $7.5 million in Series A financing led by Sierra Ventures, with participation from Baird Capital. Zaloni had kicked off fundraising efforts at the CED Tech Venture Conference in September 2015 which is where CED's Dhruv Patel introduced founders Ben Sharma and Bijoy Bora to Jim Pavlik of Baird Capital.​ (Found out more about CED's Connections to Capital program.)

Here is a Q&A with Ben & Bijoy of Zaloni on the NC company's background, the deal process, and post-deal plans. 


The Founding

Q: How did the core team come together?

We (Ben Sharma and Bijoy Bora) founded Zaloni in 2008 as a professional services firm focused on helping clients leverage data more effectively. Early on, we hired a VP of Engineering, Yin Guo.

In 2009, Zaloni began to experiment with a game-changing technology developed by Facebook and Google, called Hadoop. Hadoop made it possible for organizations to store and leverage big data in ways not previously achievable. Zaloni was at the forefront of organizations building out Hadoop data lakes, and building on top of them innovative big data use cases.

In early 2015, we decided to shift to a software company, rather than a services company, and brought on: Dan Edelson (CFO), Scott Hart (VP of Sales), and Kelly Schupp (VP of Marketing).  

As customer count increased in 2016, we sought two new additions to the leadership team: Scott Gidley (VP of Product, former founder of DataFlux at SAS) and Tony Fisher (SVP of Strategy and Business Development, former president of DataFlux at SAS).

All the execs are local to RTP, except Bijoy, who resides in Silicon Valley. 

Q: How did you shift from a custom solutions/service company to a product company?

Our team at Zaloni continued to see the same big data implementation challenges across clients, across industries – and those challenges were all related to data management and governance. We were reusing similar custom-built code and decided it was time to build a software platform that could be reused. Thus Bedrock, our flagship data lake management software solution, was born.

But changing the business model to selling product with annual recurring revenue streams (vs. project-based professional services work) was challenging. The sales cycle was longer, and selling a product meant altering almost every aspect of the company in some way – from finance to operations, customer support to sales and marketing.

In order to pivot successfully, we hired executives who were familiar with selling, marketing and building software products. It also meant taking risks, and saying no to certain parts of the services business in order to focus on software sales. 

The Deal

We kicked off our fundraising efforts at last year’s CED conference. We were thrilled to be selected to present on the main stage at the event. In fact, we met one of our investors, Jim Pavlik of Baird Capital, at the CED conference.

Q: What were your early conversations with investors like and what was the investor reaction?

We kicked off our fundraising efforts at last year’s CED conference. We were thrilled to be selected to present on the main stage at the event. In fact, we met one of our investors, Jim Pavlik of Baird Capital, at the CED conference.

Generally speaking, early conversations with investors were positive. But in order to get to an agreement on valuation obviously required negotiation. The investment firms in Silicon Valley appeared to be more comfortable with what we do, and more enthusiastic about what we could achieve in terms of growth. 

Q: Why was this the right time to raise money?

We had built a profitable, growing company experiencing 100% year-over-year growth. The services business was allowing us to invest in the product side of the business. We wanted to be less reliant on the services business and we needed additional funding to accelerate the growth required to meet the market need. Additional funding would allow us to accelerate our software development, as well as grow the sales and marketing teams. 

The fact that we were a growing, profitable company made us a good bet for investors - as long as they saw a good product/market fit with room for significant growth.

Q: How did you develop your relationships with the investors you partnered with on the deal?

We were very aggressive with reaching out to potential investors. We had also begun to invest in marketing activities with third parties such as O’Reilly media. One of our podcasts on the O’Reilly site drove two potential investors to reach out to us. Granted, we are in a hot space right now - big data management - and therefore fielded many incoming inquiries. Incoming inquiries picked up quite a bit right after the 2015 CED Tech Venture Conference.

With regards to Sierra and Baird… We met Jim from Baird at the CED Tech Venture Conference. Ben met Mark Fernandes, our lead investor at Sierra Ventures, through a mutual contact. Unlike many of the stories we had heard about Silicon Valley firms, our interactions were relaxed and comfortable. In fact, the first time Ben and Mark met was at a Panera Bread in Silicon Valley for coffee. It is where they had their second face to face as well.

The decision to choose Sierra and Baird was based on many factors. Of course, the terms of the deal were critical, but also the relationship with Mark and Jim as individuals. We all seemed to be in alignment on the big issues.

Q: Why choose these investors over others?

The decision to choose Sierra and Baird was based on many factors. Of course, the terms of the deal were critical, but also the relationship with Mark and Jim as individuals. We all seemed to be in alignment on the big issues.

The decision to go with Sierra as lead investor was based on their experience in the space. Sierra had a strong history of making investments in data space, including Teradata and Greenplum - and that was reassuring. Also, Sierra has a CXO Advisory Board that we believe will prove to be a very powerful tool for selling into large enterprises. When Mark presented us to members of the Advisory Board, they validated Zaloni’s product/market fit and expressed enthusiasm for our offerings. This helped convince Sierra that we were a strong investment but we expect it will also serve us in the future - by introducing us to execs in companies that we are targeting. 

What's Next

Q: How have the investors added value, besides capital, to date?

Mark Fernandes, Managing Director of Sierra Ventures, joined our Board of Directors as a part of the transaction. He is a strong sounding board for us regarding strategic direction and prioritization, which is key for a small company looking to grow big, fast.

In addition, Mark and Jim are able to provide us with best practices that they have seen working with other investment companies. They are able to see trends and similarities regarding what works, what doesn’t, and what pitfalls to avoid.

Q: What will this funding allow Zaloni to achieve?

We will use the proceeds to fund further expansion of the Zaloni software suite, filling in needed product features but also looking ahead and innovating within the products. We will also be able to invest in sales and marketing people and programs, research and development, and international expansion.

Our expansion into international markets will be a critical part of our overall growth strategy. In fact, we just announced an office in Dubai, UAE. The decision to open an office there was due in part because of a new client in the telco industry within Dubai, called du. But in addition to serving them more effectively, our new Dubai office will put us within eight hours of two-thirds of the world’s population and should significantly assist in our growth in the region.

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