U.S. private equity firm Insight Partners said on Thursday it was buying Swiss data management company Veeam Software, in a $5 billion bet on the fastest-growing player in the market for backing up critical information on remote servers.

The acquisition of Veeam, which is based in Baar, follows an initial $500 million investment a year ago by New York-based Insight, which manages assets worth more than $20 billion and has invested in 300 companies.

Following that initial backing, Veeam - which has more than $1 billion in annual sales and 365,000 customers worldwide - expanded its services to provide backup for Amazon Web Services and Microsoft Azure.

"Veeam's strong growth, coupled with high customer retention, unparalleled data management solutions and the opportunities to expand services into new markets, make (it) one of the most exciting software companies in the world today," Insight Partners Managing Director and Veeam board member Mike Triplett said in a statement.

The explosion of public cloud computing has fueled the rise of newer players like Veeam, which was founded in 2006, while piling the pressure on conventional storage vendors like IBM, say industry analysts.

According to consultancy IDC, Veeam achieved year-on-year revenue growth of 22.4% to $427 million in the first half of 2019 - outpacing a market average growth rate of 3.1%.

Dell Technologies grew by 5.8%, while IBM, Commvault and Veritas Technologies all suffered year-on-year declines, according to the IDC analysis.

Veeam ranks as the market share leader in Europe, the Middle East and Africa, and is No.4 worldwide.

After the deal closes in the first quarter of 2020, Veeam will become a U.S. company.

"Veeam has enjoyed rapid global growth over the last decade and we see tremendous opportunity for future growth, particularly in the U.S. market," said William H. Largent, who is stepping up to become Veeam's CEO. 

Earlier this week, the private equity firm had said it would buy cybersecurity firm Armis at a valuation of $1.1 billion. 

Goldman Sachs & Co., J.P. Morgan and Morgan Stanley served as financial adviser, and Willkie Farr & Gallagher LLP served as legal counsel, to Insight Partners. Ropes & Gray LLP served as legal counsel to Veeam.

Financing commitments for the transaction were provided by affiliates of J.P. Morgan, Goldman Sachs & Co., Morgan Stanley, Ares Management, Bank of America, Golub Capital and Antares Capital.

(Reporting by Douglas Busvine in Berlin and Ayanti Bera in Bengaluru; Editing by Michelle Martin) ((Ayanti.Bera@thomsonreuters.com; within U.S.+1 646 223 8780, outside U.S. +91 80 6749 0341;))