Jul
14
2020
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NS1 nets $40M ‘true coronavirus fundraise’ amidst surging customer demand

Apparently, the internet is still popular.

With the novel coronavirus marooning people at home for work and play, those “tubes” carrying our data back and forth have become ever more important to our livelihoods. Yet while we often as consumers think of the internet as what we buy from a service provider like Spectrum or TechCrunch’s parent company Verizon, the reality is that businesses need key network services like DNS and IP Address Management in order to optimize their performance and costs.

That’s where New York City-based NS1 has done particularly well. My colleague Ron Miller first covered the company and its founding story for us two years ago, as part of our in-depth look at the New York City enterprise software ecosystem. Fast forward two years, and NS1 couldn’t be doing better: in just the first quarter of this year, new customer bookings were up 159% year over year according to the company, and it currently serves 600 customers.

That traction in a critical infrastructure segment of the market attracted the attention of even more growth capital. Today, the company announced that Energy Impact Partners, which has traditionally invested in sustainable energy startups but has recently expanded into software and internet services, is leading a $40 million Series D round into the startup, bringing its total fundraising to date to $125 million. The round was led by Shawn Cherian, a partner at EIP who just joined the firm at the beginning of June (nothing like getting a deal done your first day on the job).

Kris Beevers, cofounder and CEO of NS1, said that COVID-19 has had a huge impact on the startup’s growth the past few months. “For example, [a] large software customer of ours [said] that our number two KPI for our coronavirus task force is network performance and saturation as managed by NS1.” Customers have made network management significantly higher priority since degradations in latency and reliability can dramatically limit a service’s viability for stay-at-home workers and consumers.

NS1’s Founding Team

“The quip that I have used a few times recently is digital transformation initiatives have compressed from five or ten years down to months or a year at this point. Everybody’s just having to accelerate all of these things,” Beevers said.

The company has doubled down on its key tools like DNS and IP management, but it has also launched new features using feedback from customers. “For example, we launched a VPN steering capability to help our customers optimize their VPN footprints because obviously those suddenly are more important than they’ve ever been,” he said. Virtual Private Networks (VPNs) allow employees to login to their company’s network as if they were physically present in the office.

While NS1 had money in the bank and increasing appetite from customers, the company was also starting a fundraise in the middle of a global pandemic. Beevers said that it was hard at first to get momentum. “April was a dead zone,” he said. “All the VCs were sort of turtle up.”

The tide began to turn by early May as VCs got a handle on their portfolios and started to survey where the opportunities were in the market given the lessons of the early days of COVID-19. “We actually started to get a huge amount of inbound interest in early May timeframe,” he said.

“Call it like a true coronavirus fundraise,” Beevers explained. It was “end to end like less than a month getting to know [Cherian] to term sheet, and all virtual. Partner meeting was all virtual, diligence all virtual. Not a single in-person interaction in the whole fundraising process, and that was the case with everybody else who was involved in the round too, so all the folks that didn’t in the end write the winning term sheet.”

What made Cherian stand out was Energy Impact Partners’ portfolio, which touches on energy, industry and IoT — sectors that are increasingly being digitized and need the kind of internet infrastructure services that NS1 provides. Also, Cherian led a round into Packet, which is a fellow NYC enterprise company that sold to Equinox for more than $300 million. Packet’s founder Zac Smith and Beevers worked together at Voxel and are part of the so-called “Voxel mafia” of infrastructure engineers in Manhattan.

With the new funding, NS1 intends to continue to expand its traction in the network layer while also doubling down on new markets like IoT.

Apr
21
2018
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NS1 brings domain name services to the enterprise

When you think about critical infrastructure, DNS or domain naming services might not pop into your head, but what is more important than making sure your website opens quickly and efficiently for your users. NS1 is a New York City startup trying to bring software smarts and automation to the DNS space.

“We’re a DNS and [Internet] traffic management technology company. We sit in a critical path. Companies point domains at our platforms,” company CEO and co-founder Kris Beevers told TechCrunch. That means when you type in the domain name like Google.com, you go to Google and you go there fast. It’s basic internet plumbing, but it’s essential.

Beevers cut his teeth as head of engineering at Voxel, a cloud infrastructure company that was acquired by Internap in 2012 for $35 million. He and his NS1 co-founders saw an opening in the DNS space and launched the company in 2013 with a set of software-defined DNS services. The startup was able to take advantage of the New York startup ecosystem early on to drive some business, even before they went looking for funding, but one incident really helped put the company on the map and effectively double its business.

That event occurred in almost exactly two years ago in 2016. One of NS1’s primary competitors, Dyn, a New Hampshire-based DNS company was the victim of a massive DDoS attack that took down the service for hours. When critical infrastructure like your domain name server goes away, you see the consequences pretty starkly and suddenly customers realized they didn’t just need this service, they needed redundancy in case the primary service went down — and with that attack, NS1’s business effectively doubled overnight.

Suddenly everyone who owned one, needed another for redundancy. One competitor’s misfortune turned out to be highly beneficial for NS1, who turned out to be in the right place at the right time with the right solution. Dyn was actually acquired by Oracle later that year.

“DNS had been around since 1983. The first 20 years were very boring with no commercial ecosystem,” Beevers said. Even when it went commercial in the early 2000s, nobody was looking at this as a software problem. “We saw everyone in this space was a hardware or networking vendor. Nobody was a software company. Nobody had thought about automation or how automation fit into the stack. And nobody saw the big infrastructure trends,” Beevers explained.

They got their start in the adtech startup space that was booming in NYC when they launched in 2013. These companies were willing to take a chance with an unknown startup, partly because they were looking for any edge they could get, and partly because they knew Beevers from his days at Voxall so he wasn’t a completely unknown quantity.

“Our ability around dynamic traffic management and performance reliability gave those ad companies [an advantage].They were able to take a chance on us. If we have a bad day, a customer can’t operate. We had limited infrastructure. They placed a bet on us because of the [positive] impact we had on their business.”

Today the company is growing fast, has raised close to $50 million and has close to 100 employees. While the bulk of those folks are in NYC, they have also opened offices in San Francisco, Londonderry, NH, the UK and Singapore.

Beevers says the Dyn incident in many ways brought the industry closer together. While they compete, they still need to cooperate to keep the domain system up and running. “We compete and are comrades in the internet mess. We will all fall apart if we don’t work together,” he said. As it turned out, being part of the whole New York infrastructure community didn’t hurt either.

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