As more enterprises sign on to the trend of digital transformation and bringing more of their legacy work into the modern era of work, a company called SnapLogic, which has built a platform to integrate those apps and data, and to automate some of the activities that use them, has raised a big round of growth funding. The company has raised $165 million, money that it will be using to continue expanding its product — specifically the AI that underpins how its platform works — and for business development.
The company has confirmed that the funding was made at a $1 billion valuation. Sixth Street Growth led the round, and it isn’t disclosing other investors. Previous backers include Arrowroot Capital (which led a previous $72 million round), Golub Capital, Andreessen Horowitz, Vitruvian (which also led a previous round), Capital One, Ignition Partners, Microsoft and a number of others. The company has now raised $373 million to date.
The new valuation is a big hike for San Mateo-based SnapLogic, which had an estimated valuation of just over $300 million in 2019 when it last raised money (based on PitchBook estimates).
That’s no surprise, however, when you consider the area of the market it’s playing in, its customer base and size. It caters to larger businesses that rely heavily on data services already, IT and tech giants and other major enterprises that include Adobe, Aramark, Drax, Emirates, Qualtrics, Magellan Health, Schneider Electric, Siemens, Workday — “thousands” of organizations in all, it says, in total processing some 2.7 trillion customer documents monthly across some 3.1 million “pipelines.”
Competing against the likes of Workato (which raised money earlier this year), Tray.io, MuleSoft and others, SnapLogic originally made its name initially as a company that helped businesses bring together and use data across disparate apps — an area that proved to be incredibly compelling for enterprises that had adopted a number of applications and architectures across multiple clouds, containers, data warehouses and on-premise data centers over the years; and were now sitting on a trove of data across all of these that they needed to figure out how to balance and use in better ways.
That has more recently given over to a big push for automation, the logic being that AI and other tools can actually do some of the more mundane and repetitive work using those applications and data once they have been brought together on a single platform. Indeed, SnapLogic today provides not just the tech to integrate and manage apps and data from one place, but also a range of automation features that can be applied to those assets.
Indeed, providing both integration and automation from a single platform — and thus making procurement easier and costs presumably more competitive — has been one of the drivers of growth for SnapLogic, the company says.
“The enterprise automation market is booming, and our latest funding is further validation of our growing momentum and product leadership in that space,” said Gaurav Dhillon, CEO of SnapLogic, in a statement. “Unlike point-to-point players, our focus on the enterprise will unlock the power of applications, data, and APIs. In the post-pandemic era, our customers will use AI and automation to revolutionize their hybrid workforces. With SnapLogic, hybrid- and multi-cloud enterprises can ensure their massive investments in public and private clouds, SaaS, cloud data warehousing, and APIs will pay off.”
However, this area of IT is not a guaranteed homerun. The chief revenue officer of Salesforce, which owns MuleSoft, admitted recently that the company was going through a “rough patch” partly due to staff turnover, and partly due to slowing sales growth. That could partly be a result of competition, but partly also that the rush of companies into big IT digital transformation projects may be entering a slightly less exuberant, more practical bedding-in period.
Investors are not deterred by this when assessing the bigger opportunity and what they see as underlying trends that will keep companies like SnapLogic growing their business.
“Modern enterprises are democratizing access to data and applications and empowering business teams to use low-code, self-service technologies to build the solutions they need to work better and faster,” said Michael McGinn, partner and co-head of Sixth Street Growth, in a statement. “SnapLogic’s seasoned management team, sound economic model, and sustainable growth plan put it in a great position to capitalize on the thriving enterprise automation sector and expanding hybrid workplace trends. We are pleased to lead this funding round and partner with SnapLogic to bring its market vision, unmatched platform, and robust partnerships to more enterprises around the world.”
Sixth Street is an interesting backer to have leading this round for SnapLogic. The firm has backed a number of scaled-up startups that have gone on to go public or seen big acquisition moves such as Airbnb, MDLIVE, Spotify and Sprinklr. That raises the question of what SnapLogic might be considering for its longer-term future. We’ll hopefully be talking to Dhillon later and will update this post as and when we learn more.