Today’s world is run on data, and the amount of it that is being produced, managed and used to power services is growing by the minute — to the tune of some 79 zettabytes this year, according to one estimate. Today, a company called Yugabyte, which has built an open-source distributed SQL database model to help handle all that volume, is announcing that it has raised $188 million at a valuation of over $1.3 billion — a big round of funding and big valuation that underscore the market demand for better tools, and the demand that Yugabyte is in particular is seeing.
The Series C is being led by Sapphire Ventures, with Alkeon Capital and Meritech Capital, Wells Fargo Strategic Capital, and previous backers Lightspeed Venture Partners, 8VC, Dell Technologies Capital, and Wipro Ventures, all also participating, among other unnamed backers. It was only seven months ago that the startup closed its Series B round (which totaled $78 million).
Wells Fargo is one of Yugabyte’s key commercial customers, alongside Kroger, Hudson River Trading, Plume and other organizations that handle large amounts of data in their businesses, and in particular are looking for SQL-based solutions that can be used across multi-cloud, heterogeneous environments. The company tells me it is approaching 50 commercial customers currently. There are more using its open-source, free version, and it says that some 1,200 organizations “have signed up for” its fully-managed solution, Yugabyte Cloud, since its beta launch last year.
We’re at an inflection point in enterprise IT at the moment, where a years-long trend of organizations gradually migrating to the cloud — and in particular more complex hybrid and multi-cloud environments — has seen a massive acceleration, in large part due to Covid-19. The pandemic precipitated a bigger shift to companies producing more data internally due to working in more remote and distributed environments, in many cases using more cloud-based digital tools to do so; and it also led to a huge surge in the world at large using more digital services. The knock-on effect is a much greater need among organizations for better database solutions to manage and work with that data, but also the realities, and complexities, of how it exists.
“Large enterprises are really only just starting to hit critical mass of workloads,” Bill Cook, Yugabyte’s CEO, said in an interview, added that those enterprises also are balancing that with some key priorities: “They are thinking a lot about infrastructure, and they don’t want to get locked into a particular cloud provider.”
Yugabyte’s pitch is that it addresses that challenge with a framework that can scale easily and securely as needed. It currently provides three SQL products to the market covering different use cases: YugabyteDB, its free, open source distributed SQL database; Yugabyte Platform, its self-managed cloud database-as-a-service product; and Yugabyte Cloud, the fully-managed cloud DBaaS launched just in September.
Yugabyte itself was borne out of first-hand experience of how other systems didn’t work as well. The startup’s founders — Kannan Muthukkaruppan (president), Karthik Ranganathan (CTO) and Mikhail Bautin (software architect) originally worked together at Facebook. There, they built the NoSQL database that powered Messenger, where they came away realising some of the shortcomings.
Initially very taken with the NoSQL “market success, we then realized the limitations of it,” said Ranganathan, who is Yubabyte’s CTO. “It’s very different to deal with these databases in production.” Specifically, as Cook described it, trends in microservices, containerization, services distribution, open source and API usage (and thus high latency and availability), are best addressed not through NoSQL but a distributed SQL database.
Jai Das, the president of Sapphire who is joining the board with is round, said that this is also what motivated him to lead this round.
“There hasn’t been any SQL innovation since MySQL,” he said, in particular to address the fact that many of the largest entprises now work with distributed databases, either because they have opted to do so, or they are required to because of regulatory demands or simply because that is how their networks and systems have evolved. Das believes that SQL will be at the heart of how databases will continue to evolve. “It is the lingua franca of how all applications will be built in the back end, and Yugabyte is the next generation.”