I’m afraid, you have to take a full backup using VB365. The backup file format from Barracuda is incompatible with the Veeam backup format. A new initial full backup of the environment seems necessary.

Kristof is spot on here. Need to start new from Veeam with VB365 backups unfortunately.

I am trying to avoid keeping a barracuda license for 5 years for compliance reasons to restore something. 

Well, there is no way to migrate your data over to Veeam as mentioned it is net new.

In addition to this comment, I will recommend you take a look at this discussion: https://forums.veeam.com/veeam-backup-replication-f2/barracuda-cloud-to-veeam-migration-t40506.html

This article is about classic VBR backup, no Barracude 365 backup data

Any way to export the data in some more universal format like PST files ?

I just did this internally, and will be doing it for several clients.  Basically, setup your backups in VB365, and once you’re comfortable with it, remove the Barracuda backups.  There’s no migration process.  This is pretty typical when changing between backup providers/products.  If you’re using an appliance, you may be able to keep the appliance unlicensed if you need to access data.  If using cloud-to-cloud backups, you’re going to be pretty much out of luck though if you want to keep old data.  I’d just double and triple check how you’re backing up in VB365 to make sure you have all the data you expected as far back as desired.  And as usual, test restoring as well just to make sure you can restore the data you’re backing up.