CAST AI captures $20M, aims for 10x growth and entrance into new cloud-related verticals

By Riley Kaminer

Amid an increasingly uncertain funding environment for startups, cloud cost optimization platform CAST AI today announced that it has raised a $20 million tranche of fundraising. Of this funding, $5 million comes from previous investors, while the remaining $15 million comes from Creandum: an early-stage European VC that has backed companies like Spotify, Klarna and Depop.

CAST AI helps companies right-size their cloud bill by optimizing the amount and type of machines they use at any given time. Clients still use their same cloud provider, but according to CAST AI, their proprietary system is able to reduce their client’s bill by an average of 65% – all without compromising performance.

In an interview with Refresh Miami, Brickell-based co-founder and chief product officer Laurent Gil explained that the company was not necessarily looking for an injection of capital. But this deal was just too good to pass up.

“[Creandum] came to us with something that made us think,” said Gil. “The company is doing so well, but can we multiply this by 10 times with their investment? And that’s the reason why we did.”

Gil likened the partnership with a VC to a marriage. “They will want to help and give suggestions,” he said. He also signaled that entering into a relationship with Creandum might be able to open doors for CAST AI with the other companies the investor has backed. “You look at their portfolio and they have some gems,” said Gil. “And they all could be our clients.”

In a statement, Carl Fritjofsson, General Partner at Creandum, echoed Gil’s excitement in working together. “CAST AI’s explosive growth is unheard of in this macro market,” he said. “This demand really shows how unique and powerful the company’s solution is.” 

“We believe the needs for DevOps automation will only grow from here, and can’t wait to see CAST AI become the leader in the cloud optimization space,” Fritjofsson continued. 

Gil founded CAST AI alongside CEO Yuri Frayman and CTO Leon Kuperman in 2020.

According to Gil, the lion’s share of this fundraise will be spent on attracting new customers, with another sizable portion going towards expanding the CAST AI’s range of products. “There will be a lot of new products this year,” he said – all powered by the company’s proprietary artificial intelligence algorithms. 

While Gil remained tight-lipped about exactly what the future of CAST AI will look like from a product perspective, he shared that we can expect the company to move into other cloud-related verticals beyond cost optimization in the very near future. To make this happen CAST AI plans to grow its currently 75-person team to more than 100 by the end of 2023.

“We are on our way to become a unicorn,” said Gil. He likened this moment for CAST to the fundraising bonanza many other startups experienced in 2021. “Raising funds is not difficult if you have product-market fit,” underscored Gil. “That’s the only thing that’s important.”

He believes that founders should remain optimistic and tirelessly chase product-market fit, and then funds will follow.

Of course, times are tough for startups that had their funds tied up in Silicon Valley Bank. “I love these guys. They are so important for the ecosystem, and we all wish that they get through this and get back with us as soon as possible.”

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Riley Kaminer