Enterprise spend on cloud services continues to go up, up, up — to the tune of $675 billion this year — thanks to organizations’ firm embrace of software-as-a-service, the popularity of distributed working, and the arrival of compute-intensive tech like AI. A startup called PointFive that believes it has found a better way to get a grip on that usage, and today it’s announcing $20 million in funding from an impressive list of backers to help it square up to the market.
New backer Salesforce Ventures is leading the Series A, with Index Ventures, Entree Capital, Sheva VC, and Vesey Ventures also participating. The company, headquartered in New York but founded out of the Israeli tech scene, has a long list of angel-founders who have taken a similar route themselves. They include Assaf Rappaport of Wiz, Mickey Boodaei, Tamar Yehoshua, Yasmin Lukatz, Dean Sysman, Raanan Raz, Kfir Tishbi and Amiram Shachar — who himself is raising a $100 million round for his current startup, the cloud security firm Upwind.
The round is also notable for how quickly it has come on the heels of its seed round. The company is only around 18 months old and announced $16 million led by Index in June 2024 (bringing the total raised now to $36 million). We understand that PointFive’s valuation is now in the region of $100 million.
Coincidentally, one of the angels, Shachar, made his name with a cloud cost optimization tool called Spot, which he eventually sold to NetApp, before going on to found Upwind. It’s the opposite story with PointFive’s CEO and co-founder, Alon Arvatz, who previously founded a security startup, IntSights, which he sold to Rapid7 for $350 million before founding PointFive in cloud optimization. This is because in the cloud, security and cost control are really two sides of the same coin: both need the same data on usage across instances, apps and endpoints to operate. (Sidenote: that was also the impetus for founding PointFive. Arvatz said he realised with his previous startup that it was a challenge to sell cloud security to teams who were under pressure to explain why they needed quite so much of it, when they couldn’t show to finance where cloud spend was going in the first place.)
Arvatz said in an interview that Shachar has now become the go-to in Israel for any investor doing due diligence before backing a startup in the cloud cost space and that’s how he came to be an investor himself in this company. Shachar thought that “We are the next big thing in the space,” Arvatz claimed.
As for what that “next big thing” is, as Arvatz describes it, previous cloud cost optimizing solutions have been limited in their scope, focusing on one particular cloud platform (Spot for example helped provide visibility on AWS), looking at tracking basic usage on that platform across a wide array of apps and services.
However, the reality of how organizations engage in cloud services is very different. Typically they have hybrid architectures in place, using multiple clouds, combined with warehousing solutions like Snowflake and more.
PointFive’s breakthrough, in Arvatz’s view, is the tech that can do that more comprehensively across more silos.
“We were able to build the technology to collect and ingest various data points from the cloud providers,” he said. “Plus we’re the only ones in the industry [that have] developed an agent-less Kubernetes solution. So today, within five minutes, we can give you all the data around your cloud infrastructure and everything you need to know about your Kubernetes clusters.”
Alongside this, he said, PointFive’s research team has developed AI algorithms to identify what the company describes as “Deep Waste”. This is cost-control equivalent (sort of) of deep learning.
“Traditionally, waste in cloud environments was unused resources,” he said. “You pay for certain resources, but you don’t use them, or use only half of them. When you have containerized environment, and a lot of managed services for storage, when networking is a huge cost and networking is very influenced by architecture, you have tons of waste that is very, very deep and hard to identify, and this is where you need very sophisticated algorithms to actually map them out and do this ongoing monitoring.” This may not be the case forever, but for today, PointFive is the only company out there that can map this, and mapping it is step one to remediating, which can include reallocating, but at the least tracking to know what to negotiate for and get in the future.
This is particularly important in newer areas like AI, where there are genuine compute constraints and high costs as a result.
It’s very interesting to see Salesforce Ventures leading this round. The company is a leader in SaaS services and so to help upsell more customers to their products, having a solution to make those customers feel more empowered is definitely in their favour. But also, as Salesforce continues to add in more cloud apps for more use cases well beyond sales and marketing, you could imagine them becoming more interested in cloud management and security down the line, too.
“We are excited to support the acceleration of PointFive’s platform and look forward to seeing the value they bring to customers through multi cloud coverage,” said Nowi Kallen, Managing Director, Salesforce Ventures, in a statement.
