Backblaze, the company behind the popular cloud backup service of the same name, has been accused of significant financial and organizational problems in a new report from Morpheus Research. If you use Backblaze, it might be a good idea to start looking for alternative services.
Backblaze is probably best known for its cloud personal computer backup service, which creates automated backups for computers and external drives with no stated limit on storage capacity. Backups can be recovered with a download, or they can be shipped to customers on an external drive. In recent years, Backblaze has expanded into cloud storage solutions for businesses and web services, as an alternative to Amazon S3. The company also publishes regular reports about the hard drives it uses in servers, which have been useful over the years for people choosing drives in their home servers.
Morpheus Research, an activist short seller firm, released a report this month outlining many problems with Backblaze’s corporate operations. Executives allegedly planned to “sell 10,000 shares a day,” then pressured employees to certify “inaccurate” financial statements. The current Chief Financial Officer of Backblaze is Marc Suidan, who previously worked at BeachBody (now “BODi”), a fitness and health company that operated as a multi-level marketing scheme (MLM) until late 2024. Morpheus alleges that Blackblaze is “lacking in transparency and willing to take aggressive and possibly illegal steps to create an illusion of financial performance to support their own exit liquidity.”
Some of this only matters for investors buying stock in Backblaze, but there are some worrying signs for anyone using it as their primary backup service. Backblaze is not profitable, and the company is losing more money now than when it became publicly traded in November 2021—it reported a loss of $14.4 million in the fourth quarter of 2024. It’s normal for companies to lose money for years in the hope they will become profitable (it took Uber over a decade), but Backblaze doesn’t appear to be heading in that direction, especially if the additional reporting from Morpheus Research is correct. If Backblaze suddenly shuts down, customers might lose access to existing backups.
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It’s important to note that Morpheus Research is a financial firm that investigates companies and shorts their stocks if they find evidence of corporate fraud. It’s similar to the better-known Hindenburg Research, and it’s staffed by some former Hindenburg researchers. Morpheus and other similar companies are not impartial groups, since they profit if the company’s stock price falls after the report is released, but much of the report lines up with existing public information.
Backblaze has not released a public statement about the report. We reached out to the company, and we will update this article when we hear back. If you are a Backblaze customer, you might want to start looking into alternative services for personal backups, like IDrive or pCloud.
Source: Morpheus Research
