Archera, a Seattle-based startup that sells tools to help companies reduce cloud computing expenses, raised $17 million in a Series B investment round.
Founded in 2019 by brothers Aran Khanna and Nikhil Khanna, Archera offers a free product that crunches a company’s cloud-related finances to identify ways to save costs and take advantage of promotional credits.
The startup generates revenue via a separate offering called “Insured Commitments.” Companies will often sign long-term commitments with cloud computing providers to receive discounts. But it can be difficult to predict how many resources are needed, and for how long.
Archera provides a middle ground by selling insurance-backed guarantees. The company will pay the cost of any remaining unused resources for customers that have the guarantees.
The idea is to help companies reduce the risk of overcommitting to cloud computing capacity for projects such as migrations or infrastructure transitions.
“Archera makes money by taking in more in premiums than we pay for customers unused commitments,” Aran Khanna told GeekWire.
Khanna said customers use the guarantees for generative AI-related projects “to hedge the technical risk associated with committing to a set of GPU machines for training and inference long-term.”
Archera announced that it secured $100 million in lending capacity to expand underwriting capabilities.
The startup has a “co-sell” partnership with Amazon Web Services and plans to establish similar deals with Microsoft and Google.
The 22-person company said it has increased its revenue run rate by 500% year-over-year. It has more than 400 customers.
HighSage Ventures led the Series B round, which included participation from Ridge Ventures, Amplify Partners, and PSL Ventures. Total equity funding to date is $27.5 million.
Aran, a finalist for Young Entrepreneur of the Year at the 2021 GeekWire Awards, previously co-founded a retail startup called Glia Intelligence with Nikhil. He also worked as an AI engineer at Amazon Web Services and interned at Microsoft Azure. Nikhil completed engineering internships at Facebook and Uber.
Both brothers graduated from Lakeside School in the Seattle region — the alma mater of Bill Gates.
GeekWire previously wrote about Aran when his Facebook internship was rescinded after he exposed a flaw in the social media company’s Messenger app. Nikhil was featured in 2013 after he created a mobile game company as a teenager.
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