CapitalOne liked Snowflake Computing’s new data warehouse product for financial services companies so much that it decided it wanted to own a piece of the company.
The two companies plan to announce Wednesday that CapitalOne has invested $5 million in Snowflake Computing, adding the icing on top of a $100 million round raised earlier in the year by the database startup led by former Microsoft executive Bob Muglia. Snowflake is also introducing Virtual Private Snowflake (VPS), a version of its flagship product that has been customized with the security requirements of financial services companies in mind, Muglia said.
CapitalOne has been using VPS as a beta customer and has quickly become one of Snowflake’s biggest customers, Muglia said. “We couldn’t play effectively in the high-end financial services industry without VPS,” he said.
Snowflake operates a cloud-based data warehouse service. A data warehouse is a specialized version of a regular old database that has been optimized to read and analyze data as quickly as possible, and they are generally used to generate business intelligence reports that assess the health of a business or product line.
Financial services companies are obsessed with data analysis and have historically been among the earlier adopters of cutting-edge enterprise technology, but it’s harder for them to use off-the-shelf cloud services, Muglia said.
“Financial services has been slower to move to the cloud than other industries, largely because they operate in regulated environment,” he said. VPS gives them features such as a dedicated instance inside of Amazon Web Services that Snowflake manages for them, and VPS customers manage their own keys to the database, instead of relying on a provider that could be subject to a subpoena.
Snowflake has now raised $210 million in funding since it was founded in 2012. After a long career at Microsoft running its server business and a short stint at Juniper Networks, Muglia joined the San Mateo, Calif.-based company as CEO in 2014.