The demand for cloud services is soaring, driven in part by advancements in AI. According to Goldman Sachs Research, cloud-related spending more than doubled between 2019 and 2023 and is projected to surpass $2 trillion by 2030. However, poor management of these expenses can threaten returns on investment. Yodar Shafrir, while working at Run:ai, a workload management company Nvidia is looking to acquire, experienced this firsthand.
“I saw how DevOps teams were often frustrated by resource inefficiencies,” Shafrir shared with TechCrunch. “Costs from unused resources were high, and applications frequently crashed due to insufficient resources. This put constant pressure on engineers to tweak resource allocations, pulling them away from their main development tasks.”
During this time, Shafrir connected with Guy Baron, then head of R&D at Wix, who shared similar concerns. Their conversations led to the creation of ScaleOps, a startup aimed at tackling the challenge of optimizing cloud resource usage.
Operating within the FinOps sector—a subset of cloud cost management—ScaleOps competes with established players like Broadcom’s CloudHealth, IBM’s Kubecost and Cloudability, as well as startups like Exostellar, Ternary, CloudZero, and ProsperOps. Like its competitors, ScaleOps seeks to automate cloud management by analyzing app performance requirements alongside available resources and costs, ultimately reducing the cloud services footprint.
ScaleOps is self-hosted and compatible with any cloud platform, on-premise setups, or isolated (air-gapped) environments. “Our platform automates resource optimization, helping to reduce waste, enhance performance, and streamline workflows across DevOps, FinOps, and application teams,” said Shafrir, who serves as the company’s CEO. “This approach resonates with companies looking to improve efficiency during economic slowdowns.”
ScaleOps’ value proposition appears to be gaining traction, with clients like SentinelOne, Cato Networks, and Wiz on its roster. Shafrir expects the company’s customer base to exceed 100 by the end of the year.
This growth has also caught the attention of investors. ScaleOps recently secured $58 million in a Series B funding round, bringing its total capital raised to $80 million. While Shafrir did not share revenue or spending details, he emphasized that ScaleOps maintains a “prudent financial strategy” to support both sustainability and expansion.
The rising popularity of FinOps has undoubtedly worked in ScaleOps’ favor. A recent survey revealed that over 80% of companies now have dedicated FinOps teams, with another 16% actively considering establishing one. Additionally, 71% of respondents reported increased FinOps investment over the past year.
“The slowdown in the tech sector has heightened the need for operational efficiency and cost management,” Shafrir noted.
The funding round, led by Lightspeed Venture Partners with participation from NFX, Glilot Capital Partners, and Picture Capital, will enable ScaleOps to expand its New York-based team from 60 to over 200 employees by 2026.
Post a Comment