Hydrolix Closes $80 Million Series C

Hydrolix Inc. announced the closing of an $80 million Series C investment round, led by QED Investors, joined by Blumberg Capital, Frontline Ventures, Pruven Capital and Sozo Ventures, alongside existing investors that include Akamai, AV8 Ventures, Ericsson Ventures, NAVA Capital, Oregon Venture Fund, S3 Ventures, Uncorrelated Ventures and Wing Venture Capital. Chuckie Reddy, QED partner and head of growth investments, will join the Hydrolix board as a director.

Portland-based Hydrolix solves the problem of ever-ballooning volumes of log data and an existential need to perform analytics on that data to meet demanding security, compliance and service performance expectations. The fast-growing start-up has seen an eightfold sales increase in the past year, driven by these trends. Its platform transforms the economics and analytics performance of log data retention. The Hydrolix streaming data lake platform powers security, observability, e-commerce, advertising technology and other log-intensive use cases.

Investors in the Series C were drawn to the deal largely due to Hydrolix’s success in building sales momentum behind a comprehensive channel strategy. The cornerstone of that strategy is a partnership with Akamai, whose TrafficPeak offering is a white label of Hydrolix. Additionally, Hydrolix recently added Amazon Web Services as a go-to-market (G) partner and built connectors for massive log-data front-end ecosystems like Splunk. These and similar efforts have driven the company’s sales growth, and the Series C is intended to amplify this momentum.

“This round builds on the discovery that 400-plus new Hydrolix customers have made in the past year,” reflected Marty Kagan, cofounder and CEO, Hydrolix. “Successful global streaming events like the Super Bowl and the Olympics, alongside cloud platform launches like AWS and integrations with ecosystems like Splunk, Databricks and Kibana have greatly expanded our availability and value proposition. This round will help extend Hydrolix availability to additional cloud platforms for the biggest security, observability, adtech and RUM platforms. We’ll also expand the sources of data we ingest while giving customers the power to maintain existing interfaces and processes. Hydrolix is reducing the cost to store and apply analytics to our customers’ valuable log data, and that’s propelling our tremendous growth.”

“At QED, we believe data is one of the most powerful assets to a business, especially in the fintech industry,” said Chuckie Reddy, partner and head of growth, QED. “The ability to collect, store and compress data is critical to a company’s success. It was immediately clear to us that Hydrolix leadership’s approach to the market, explosive growth and the world-class team they’ve built were providing the best solution to the market. As data needs increase geometrically, Hydrolix will be instrumental in keeping costs low and increasing the effectiveness of using that data. We are thrilled to partner with Marty and his team on the journey to bringing the Hydrolix solution to financial services and beyond.”

Each investor in the round has expertise and relationships in different vertical markets and geographies. QED brings strong financial services connections, as the firm was founded by Nigel Morris, co-founder, Capital One, while Pruven adds insurance, real estate and healthcare to the mix. Sozo Ventures and Frontline Ventures will help accelerate Hydrolix’s already substantial penetration of the Asian and European markets respectively.

Vertical and Geographic Market Success Driving Growth for Hydrolix
Financial services companies like Navy Federal Credit Union in the United States and others use Hydrolix for reputation management, compliance and security. Global media streaming events like the FOX Sports broadcast of the Super Bowl and others use Hydrolix to provide a smooth online viewer experience and scale rapidly to ingest tens of millions of log events per second from multiple sources. Read more about these use cases in this blog post.

Hydrolix’s ability to execute internationally has been a key factor fueling its rapid growth. A fully distributed company from its founding, Hydrolix has sales, service and engineering team members in 12 time zones across Asia, Europe, Oceania and South America. More than 40% of the company’s revenue is now earned from international customers. The addition of Sozo Ventures and Frontline Ventures, along with regional partnerships, is intended to solidify this distribution of revenue.

Other Quotes from Investors
“When I co-founded Capital One, few companies at the time understood the power of capturing and analyzing data to make informed business decisions. And because customer data was so expensive to store, it was getting destroyed. We started capturing and retaining the data on our customers to harness those tremendous data sets and pioneered customised credit card products based on specific customer attributes. And now Capital One is poised to become one of the largest credit card issuers in the world,” said Nigel Morris, co-founder and managing partner, QED Investors. “Today, data is generated in increasingly larger volumes to make these same business decisions, yet companies still lack cost-effective ways to store, index and query data at scale. Hydrolix has created a product to uniquely solve just this problem.”

“With AI driving greater consumption of cloud infrastructure resources, the extraction of intelligence from log data is at risk of being left behind as economics get crushed by the sheer volume of data,” said Brennan O’Donnell, partner, Frontline. “What attracted us to Hydrolix was not just that they have a product that’s proven itself in production on the largest global stages, but that their timing aligns with market opportunities we already identified. Hydrolix already has a strong European presence, with customers such as Volkswagen and the Paris Olympics, and we’re excited to support their continued expansion and investment across Europe.”

“When we first invested in Hydrolix in 2021, it was the experience and vision of the founding team that drew us in,” said Matt Compton, general partner, Oregon Venture Fund. “Since then, we’ve been impressed with the company’s growth and market traction. We rarely see a company achieve 8x ARR at scale in a single year. Hydrolix is a leader in the innovation ecosystem of Oregon. We’re proud to be a part of the next chapter of the company’s growth and are excited to see the impact it will have on Portland and beyond.”

“We are thrilled to partner with Marty and his team! Hydrolix’s groundbreaking approach to high-performance, cost-efficient data streaming and analytics is transforming the industry,” said Sudip Chakrabarti, partner, Pruven Capital. “Its rapid growth—at a scale rarely seen—underscores the strength of its product and the immense value it delivers to enterprise customers. We see a significant opportunity for our corporate partners in Financial Services to leverage Hydrolix’s solutions for data-in-motion use cases in security and observability, and we look forward to supporting the team as they continue to scale.“