In January, after raising $263 million, Snowflake Computing CEO Bob Muglia indicated that the next time his fast-growing cloud data warehousing company tapped the financing markets, it would likely involve an IPO. Plans changed.
Snowflake plans to announce Thursday that it has raised a new $450 million round led by Sequoia Capital. Existing investors, including Seattle’s Madrona Venture Group, participated in the round and have now poured $923 million into the former Microsoft executive’s new company. The latest round comes with a pre-money valuation of $3.5 billion.
“I certainly didn’t see this coming in January,” Muglia said in an interview with GeekWire. “Simply put, the speed of our growth has increased so much that it’s really appropriate for us to get more capital.”
Snowflake built a data warehouse — a special kind of database designed for analytical applications — designed for the cloud computing era around its own database engine, and the company is “approaching $100 million in revenue,” Muglia said, which would be about four times the “tens of millions” figure he quoted back in January for 2017 revenue.
Headcount has doubled this year to 650 employees, and Snowflake is seeing an increasing number of deals valued at over $1 million, Muglia said. The company plans to reach around 1,000 employees by the end of this year, and plans to hire another 1,000 next year, including an expansion of its Bellevue engineering center.
An IPO is still on the table around 2020, Muglia said, which of course assumes the financial markets will remain intact that far into the future. Last August, the company hired former Talend CFO Thomas Tuchscherer, making the classic pre-IPO to grab a CFO who has experience taking a company public.
While the core data warehouse remains the main driver of Snowflake’s growth, Muglia foreshadowed Snowflake’s product roadmap by suggesting that the Snowflake Data Sharing feature on that data warehouse could evolve into a product of its own. Now that everyone has figured out the value of “big data,” attention is turning toward ways to share massive amounts of data with trusted partners or suppliers, which is not an easy thing to do without resorting to one of those huge data boxes that cloud vendors sell to help new customers move their data.
“If the Snowflake data warehouse is disruptive, then data sharing is business transformative, and will really change the way people do business,” Muglia said.
This is shaping up to be an interesting trend in the evolution of data strategies, as cloud providers and enterprise software companies start rolling out integrations and partnerships designed to allow mutual customers to share data between their products. Just a few weeks ago, Microsoft, Adobe, and SAP unveiled a data-sharing partnership, and AWS and Salesforce rolled out something similar.
The new funding will allow Snowflake to expand its presence around the world, adding to a new engineering center in Berlin and hiring sales, marketing, and services employees in all major regions. Next year it will also increase the number of regions in which it is available on Amazon Web Services and Microsoft Azure’s clouds, with plans to add 12 new regions across both cloud providers and introduce multiregion support for customers.