Saudi Aramco's venture arm investing in US start-up Wasabi

The deal will give Wasabi a foothold in the Middle East, its chief executive says

Saudi Aramco is the world's biggest oil company. EPA

The venture capital arm of Saudi Aramco, the world's largest oil-exporting company, is investing in Boston-based cloud storage start-up Wasabi Technologies.

One of the Aramco's funds, Prosperity7 Ventures, is contributing to a $25 million follow-on investment, alongside the venture capital arm of disk-drive maker Western Digital, Wasabi chief executive David Friend told Bloomberg.

Aramco did not immediately respond to a request to comment.

Wasabi was founded in 2016 and launched in 2017.

Mr Friend, a serial entrepreneur, did not provide the exact amount invested by Aramco. He co-founded Carbonite, a data back-up company sold to Canada’s Open Text in 2019 for $800m.

Wasabi is aiming to take on Amazon Web Services’ storage product S3, which Mr Friend called the industry standard, by trying to be cheaper and faster.

The new funds are on top of the $112m Wasabi raised last month in a round led by Fidelity Management and Research. The company was valued in that round at $700m and has now raised about $244m, Mr Friend said.

Western Digital, the largest maker of computer hard disk drives, invested in the company because storing data in the cloud aligns with its strategy, Daniel Flynn, president and treasurer of Western Digital, said in a statement.

Prosperity7, a $1 billion diversified venture capital fund, is part of Aramco Ventures, according to its website. It is named after Saudi Arabia’s seventh oil well, which struck oil in the 1930s.

Aramco uses a lot of data to model oil wells, Mr Friend said.

“Aramco is always on the lookout for technologies that could be beneficial to their exploration business,” he added. “They have a mountain of data they need to store.”

The deal gives Wasabi a foothold in the Middle East, which Mr Friend called a modern and rapidly emerging market.

He said it’s unclear if Wasabi will enter the Saudi market. He said Aramco didn’t file for approval from the Committee on Foreign Investment in the US since his legal advisers said it wasn’t necessary for this investment.