Startup Deep Dive : Tessell — a 0 million round arrived a year into a federal IP-theft lawsuit from its founders’ old employer

Tessell sells a promise that sounds like a contradiction: a database run by someone else, inside an account only you control. Since 2021 that pitch has pulled in $94 million from investors and 40 named enterprise customers, according to TechCrunch’s report on the company’s April 2025 funding round.

The same pitch is now being tested in a federal courtroom. Since March 2024, Nutanix — the company where all three Tessell founders used to work — has told a judge in the Northern District of California that Tessell was not really built from scratch at all, but from stolen source code. Investors wrote Tessell a $60 million cheque a year into that lawsuit anyway. Both halves of that story are true, and both are documented below.

Quick facts

What they do

Tessell sells a fully managed database service to large, regulated enterprises — banks, insurers, energy companies, transportation firms — that run big estates of Oracle, SQL Server, PostgreSQL, MySQL and MongoDB and want the automation of a cloud database without handing their data to a vendor’s own infrastructure. Instead of hosting customer databases on its own servers the way Amazon RDS or Azure SQL Database do, Tessell deploys its control plane inside the customer’s own cloud account, using the customer’s own encryption keys, across AWS, Azure, Google Cloud and Oracle Cloud Infrastructure (Tessell, company website). The company calls this “bring your own cloud,” and it is the entire basis of its sales pitch to customers who cannot legally or contractually move data outside their own governance boundary.

The origin

Bala Kuchibhotla spent more than a decade at Oracle building database private- and hybrid-cloud products, then four years at Nutanix, where he founded and ran Nutanix Era, an on-premises database automation product (The Org; company profile pages). Bakul Banthia followed a similar path, from engineering roles at Oracle into Nutanix. Watching enterprises try to move Oracle and SQL Server estates into the public cloud, the founders kept hitting the same wall: regulated customers wanted the automation of a managed database service, but would not accept losing control of their infrastructure, their keys or their compliance boundary to hand it to a hyperscaler’s own account. Founded in 2021, Tessell was built to resolve that specific tension — automation without custody — by running its software inside the customer’s own cloud tenant rather than its own.

The struggle years

Tessell’s early years were shadowed by the unfinished business of where its founders came from. In May 2022, the U.S. Securities and Exchange Commission settled insider-trading charges against Kuchibhotla, by then already running Tessell, for conduct dating to his time at Nutanix. The SEC found that in late January 2019 he learned at a confidential all-hands meeting that Nutanix’s results had deteriorated, then sold Nutanix shares and options in the days before the company’s 28 February 2019 earnings announcement — a announcement after which Nutanix stock fell 32.7% the next trading day. The SEC calculated $292,980 in profits and losses avoided, and Kuchibhotla agreed to pay more than $585,000 to settle the case without admitting or denying the findings (U.S. SEC, Litigation Release, May 2022).

The bigger blow landed on 20 March 2024, when Nutanix filed suit against Tessell in the U.S. District Court for the Northern District of California, naming Kuchibhotla, Khanuja and Banthia directly. Nutanix’s complaint alleges the three men used Nutanix computers, servers and the Nutanix Era source code to plan, build and demonstrate Tessell’s product while still on Nutanix’s payroll, and argues that the speed with which Tessell reached market is itself evidence of the theft (Nutanix, Inc. press release; The Register, March 2024). Tessell has denied wrongdoing. The case has not been resolved: court records show a March 2025 order compelling Nutanix’s copyright, tortious-interference and injunctive claims to arbitration while staying the rest of the case, and in May 2026 the court stayed the action again pending that arbitration (Justia docket, Nutanix, Inc. v. Tessell, Inc., No. 3:24-cv-01729).

The turning point

The clearest test of whether the Nutanix dispute would sink Tessell came in the thirteen months after the lawsuit was filed. On one side of that line: a March 2024 complaint from a public company with far deeper pockets, alleging the sort of founder misconduct that has killed funding rounds at other startups before the ink on a term sheet dries. On the other side: by 9 April 2025, Tessell had grown to 40 enterprise customers — Moody’s, Aditya Birla Capital, Tata Capital, Jubilant Ingrevia and Forbes among them — and closed a $60 million Series B led by WestBridge Capital, with B37 Ventures and Rocketship.vc joining and Lightspeed Venture Partners returning from the Series A (TechCrunch; Tessell press release, April 2025). A litigation overhang that could plausibly have frozen the company’s growth instead sat alongside its largest funding round to date, with the arbitration still unresolved as of this writing.

The money behind it

Tessell has raised $94 million across two disclosed rounds, both from mostly the same core backers returning as the company scaled.

• Series A — $34 million, announced 30 December 2022: led by Lightspeed Venture Partners, giving Tessell its first outside capital roughly eighteen months after founding (Crunchbase).
• Series B — $60 million, announced 9 April 2025: led by WestBridge Capital, with new participation from B37 Ventures and Rocketship.vc, and continued backing from Lightspeed Venture Partners (Tessell press release; TechCrunch, April 2025).
• Total disclosed funding: $94 million as of April 2025, with no valuation disclosed by the company or its investors in either round (TechCrunch).
• Stated use of the Series B: go-to-market expansion into Europe and Asia-Pacific, scaling the San Ramon and Bengaluru teams, and research and development toward AI-assisted database management (Tessell press release, April 2025).

How it makes money

Tessell charges enterprises to manage databases that continue to run on infrastructure the customer pays for and controls directly — a model closer to software licensing on top of the customer’s own cloud bill than to traditional infrastructure hosting.

• What the customer pays for: a per-database management fee covering provisioning, patching, backup, cloning, high availability and disaster recovery — billed on top of, not instead of, the customer’s own AWS, Azure, Google Cloud or OCI bill (Tessell, company website).
• Where the underlying infrastructure cost sits: because Tessell deploys inside the customer’s own cloud account rather than its own data centres, compute and storage costs are paid by the customer straight to the hyperscaler — Tessell’s revenue is the automation layer, not the infrastructure margin.
• Pricing structure: the company says it prices per instance rather than through consumption-based metering, and markets this as more predictable than usage-metered alternatives (Tessell, company website).
• The part people get wrong: because Tessell never touches customer infrastructure billing, its own India subsidiary’s revenue — the ₹69.56 crore RoC figure cited above — reflects services the Bengaluru entity provides to its U.S. parent, not the company’s global subscription revenue, which is not separately disclosed.
• Company-stated efficiency claims: Tessell says customers have cut total cost of ownership by 25-65% and improved operational efficiency by about 70% versus self-managed databases, and cites one Fortune 100 energy customer that consolidated more than 700 Oracle databases onto the platform for a stated €1.45 million in annual savings (Tessell press release, April 2025) — company-stated figures, not independently audited.

The numbers

Tessell, Inc. is a private U.S. company and does not publish consolidated global financial statements. The clearest public financial trail runs through Tessell India Private Limited, the Bengaluru entity, whose annual filings with India’s Registrar of Companies are abstracted by corporate-data aggregators.

The FY24 revenue figure above is arithmetic, not a separately filed number: it is what ₹69.56 crore divided by 1.311 (the reported 31.1% growth rate) implies, shown for context rather than as an independently sourced data point. Absolute profit figures for either year are not disclosed in the public extracts of the RoC filing available through Tofler and TheCompanyCheck; only the year-on-year growth rates are.

Where the money comes from

• Geography, as of April 2025: two-thirds of Tessell’s 40 named customers are in India, with the remainder in the United States and other markets — a concentration the company is trying to correct with the Series B’s earmarked Europe and Asia-Pacific expansion (TechCrunch, April 2025).
• Database engine mix: the platform’s marketing and case studies lean heavily on Oracle workloads — including Oracle RAC and Exadata — reflecting the founders’ Oracle background, alongside growing support for PostgreSQL, MySQL, SQL Server, MongoDB and the Milvus vector database (Tessell, company website; docs.tessell.com).
• Cloud mix: general availability on Google Cloud Marketplace was reached only on 26 March 2025, well after AWS, Azure and Oracle Cloud Infrastructure support — meaning most of Tessell’s customer history to date sits on the three earlier clouds (IntelligentCIO North America, March 2025).
• The surprise: the India entity’s own revenue — the ₹69.56 crore RoC-filed figure — is a fraction of what press coverage implies about the parent’s scale from its $94 million raised and 40 enterprise logos, because it captures intercompany services billed to the U.S. parent rather than global customer subscriptions.

The risks

• Unresolved litigation with a well-capitalised accuser: Nutanix’s March 2024 lawsuit alleging IP theft by all three founders remains active, with the dispute currently split between arbitration and a stayed federal case as of May 2026 (Justia docket, No. 3:24-cv-01729). An adverse arbitration finding could result in damages, an injunction on parts of the product, or reputational damage with enterprise buyers who vet vendor governance closely.
• Customer and geography concentration: with only 40 named customers as of April 2025 and two-thirds based in India, the loss of a handful of large accounts, or a slower-than-planned Europe and Asia-Pacific expansion, would disproportionately affect revenue (TechCrunch, April 2025).
• Competing against hyperscalers on their own databases: Amazon RDS, Azure SQL Database and Google Cloud SQL are built and sold by the same clouds Tessell depends on for distribution, each with far larger sales, support and R&D budgets than a company of roughly 143 employees (TechCrunch/SiliconANGLE/DBTA, April 2025); Tessell’s “bring your own cloud” pitch has to keep beating that scale on trust and control rather than price.

The takeaway

Tessell’s founders came out of a company that is now suing them, over a product they say they built independently and Nutanix says they stole — and investors funded the company anyway, twice, with the second cheque arriving a year into the lawsuit. The lesson is not that litigation does not matter; the case is still open and could yet cost Tessell money, product features or credibility. It is that enterprise buyers and growth investors were both willing to underwrite a genuinely narrow, well-defined technical bet — automation without ceding infrastructure control — even with the founders’ own legal history unresolved in the background. A sharp enough wedge into a real enterprise constraint can outrun a founder’s baggage for a while; it does not make the baggage disappear.

Frequently asked questions

What does Tessell do?

Tessell sells a multi-cloud database-as-a-service platform that manages Oracle, PostgreSQL, MySQL, SQL Server, MongoDB and Milvus databases while running inside the customer’s own AWS, Azure, Google Cloud or Oracle Cloud Infrastructure account, rather than Tessell’s own infrastructure.

Who founded Tessell, and when?

Tessell was founded in 2021 by Bala Kuchibhotla (CEO), Bakul Banthia and Kamal Khanuja, all previously of Nutanix, where they built the Nutanix Era database automation product; Kuchibhotla and Banthia also spent years at Oracle before that.

How much funding has Tessell raised?

Tessell has raised $94 million in total: a $34 million Series A led by Lightspeed Venture Partners announced in December 2022, and a $60 million Series B led by WestBridge Capital, with B37 Ventures, Rocketship.vc and Lightspeed Venture Partners also participating, announced on 9 April 2025. No valuation has been publicly disclosed for either round.

What is the Nutanix lawsuit against Tessell about?

Nutanix, the former employer of all three Tessell founders, filed suit in the Northern District of California on 20 March 2024, alleging the founders used Nutanix’s source code, servers and other resources to build Tessell while still employed there. Tessell denies the allegations. As of May 2026, parts of the case have been sent to arbitration and the federal case remains stayed pending that outcome.

Is Tessell profitable?

Tessell, Inc. does not disclose global financial results. Its Indian subsidiary, Tessell India Private Limited, reported ₹69.56 crore in revenue and a profitable, growing bottom line (profit after tax up 28.6% year-on-year) for the year ended 31 March 2025, according to its RoC filings — but this entity reflects services billed to the U.S. parent, not the company’s worldwide subscription revenue.

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• TechCrunch, “Tessell snags $60M to drive data management at scale,” April 2025
• Tessell, press release, “Tessell Raises $60M Series B to Expand AI-Driven Multi-Cloud Data Ecosystems,” April 2025
• SiliconANGLE, “Tessell reels in $60M for its database-as-a-service platform,” April 2025
• Database Trends and Applications, “$60M for Tessell Fuels Innovation for Multi-Cloud Database Management and AI Advancement,” April 2025
• Tessell blog, “Tessell raises $60M in Series B funding to fuel AI-driven cloud data management,” April 2025
• Crunchbase, Tessell Series A funding round profile, December 2022
• Tofler, Tessell India Private Limited company financials, accessed September 2026
• TheCompanyCheck, Tessell India Private Limited FY2026 company profile, accessed September 2026
• U.S. Securities and Exchange Commission, Litigation Release No. 25450 and Administrative Proceeding File No. 3-20844 (Balasubrahmanya Kuchibhotla), May 2022
• The Register, “Nutanix alleges IP theft by DBaaS startup Tessell,” March 2024
• IT Pro, “Nutanix sues Tessell over claims founders used IP to build rival products with ‘strikingly similar features’,” March 2024
• Channel Futures, “Nutanix Lawsuit: ‘Shocking’ Behavior by Tessell Founders,” March 2024
• Nutanix, Inc., press release, “Nutanix Files Theft of Intellectual Property Lawsuit Against Tessell, Inc.,” March 2024
• Justia, Nutanix, Inc. v. Tessell, Inc., Case No. 3:24-cv-01729 (N.D. Cal.), docket entries reviewed September 2026
• IntelligentCIO North America, “Tessell introduces fully managed database service on Google Cloud,” March 2025
• Tessell, company website, About Us and platform pages, accessed September 2026
• Trading Economics, USD/INR exchange rate, 18 September 2026

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