Salesforce And Berkshire Hathaway Invest In Snowflake As It Seeks IPO

Founded in 2012, Snowflake is a prime competitor of e-commerce giant, Amazon. The San Mateo company provides data warehouse technology, which compiles information from different systems so clients can analyze it together in the same place. In the fiscal year that ended January 30, its revenue jumped 174% to $264.7 million compared to the previous year.

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In a filing released Snowflake, it was revealed that Berkshire Hathaway and Salesforce Ventures have both agreed to buy $250 million worth of shares in the company, as it prepares to go public.

Additionally, Berkshire Hathaway agreed to buy another 4 million shares from one of Snowflake’s current stockholders in a secondary transaction. The midpoint of its pricing range for the IPO is expected to be $80 per share, which will value Berkshire Hathaway’s stake at more than $550 million at the time it goes public.

According to analysts, the Berkshire Hathaway investment is unusual for the company. Run by business tycoon Warren Buffett, the firm typically makes high-profile bets on giant companies. For other investors, this undoubtedly is a positive sign.

Snowflake planned to raise up to $2.3 billion in one of the biggest tech initial public offerings of the year. On September 16, it was announced that its $3.3 billion initial public offering surpassed the record for a software company, and it became the biggest IPO in the U.S. this year. Its share price soared as much as 166% that same day.

This makes the California firm more valuable than Uber, Dell Technologies, and General Motors, according to Bloomberg. Snowflake’s IPO also surpasses that of Chinese e-commerce giant Alibaba, which was the previous record holder for the largest IPO listed in the U.S.

“So far, so good,” said Snowflake Chief Executive Officer, Frank Slootman in an interview. “IPOs for us are milestones along the way. They’re not endpoints. We needed to do this for a number of reasons, especially to raise the stature of the company in the marketplace.”

Snowflake’s offering was led by Goldman Sachs Group Inc. and Morgan Stanley. The company’s shares are trading on the New York Stock Exchange under the symbol SNOW.