Snowflake, the cloud-based data warehouse service, announced an enormous investment round today, pulling in a whopping $263 million on a unicorn valuation of $1.5 billion.
The round was led by a trio of big-name Silicon Valley VC firms including existing investors Iconiq Capital and Altimeter Capital and new investor Sequoia Capital. Today’s announcement comes on top of the $100 million round last spring and brings the total raised to $473 million, according to the company.
CEO Bob Muglia said that this is probably the final round before a possible IPO. As you would expect though, Muglia wasn’t making any commitments in terms of a timeline. “We have put ourselves on the path to IPO. That’s our mid- to long-term plan. This funding allows us to go directly to IPO and gives us sufficient capital, that if we choose, IPO would be our next funding step,” he said.
As for that unicorn valuation, he did say it’s something the company needs to grow into in terms of revenue, but he firmly believes it’s a reachable goal. “It’s a realistic number, one we will grow into. When we look at our revenue and ultimately generate earnings, we believe this is realistic and we will be able to grow upon this over time,” he said.
While Muglia wouldn’t discuss specific revenue numbers, he did say Snowflake has been tripling or better year over year and that growth was part of what attracted investors. He says that the company has over 1000 customers, up from 450 in April. What’s more, they are continuing to add new names and expect to double in the next year. Current customers include Capital One, Adobe, Nielsen and Rent the Runway. Muglia says that the market is accelerating as companies become more comfortable with moving massive data stores to the cloud.
Muglia, who was a Juniper Networks and Microsoft executive before joining Snowflake as employee #34, acknowledged the enormity of the size of the round, but he says they are competing against some of the biggest names in the tech world and that requires massive amounts of capital.
“The money gives us the ability to compete against the alternatives that customers are looking at and these are the richest companies in the world: Amazon, Microsoft Oracle and Google,” he explained.
Muglia believes the company’s data lake technology is a foundation for a much broader vision that provides a platform for building data applications. This could be for data sharing between customers or to sell that data. He foresees companies building businesses on top of the data stored in the Snowflake data warehouse much like companies have built businesses on top of the Salesforce platform. In fact, that’s a big part of his long-term vision for the company.
For now, the company has 330 employees, up from 175 during the $100 million round in April. He expects that to rise to 600 within the year.
He’s confident because he has led the company through tremendous growth and he believes they are just reaching a point of broader acceptance in the marketplace that can really drive that growth further. “One of the biggest questions from customers has been, ‘what is your future.’ It became a lot easier to answer that after the last round and this round will put that question to rest,” he said.