Data driven operations will eventually become the norm with businesses learning to harness the information they amass. Snowflake, the database software as a service company, wants to play a key role in making that happen and thanks to Sequoia Capital it just got a lot closer to achieving that goal.
The San Mateo, California-based SaaS company recently raised $450 million in a venture round of fundraising, led by Sequoia Capital. A slew of others participated in the round including Madrona Venture Group, Redpoint Ventures, Altimeter Capital, Capital One Growth Ventures, Sutter Hill Ventures, Wing Ventures, Iconiq Capital, and Meritech Capital. With the fresh funding Snowflake reportedly has a valuation of $3.5 billion.
Snowflake isn’t the first data warehousing software company with an impressive valuation, but what it hopes makes a difference is that it is built from the ground up for the cloud, taking advantage of the seemingly limitless data and computation capacity the cloud provides. That means companies don’t have to make choices between which employees can have priority access to the data warehouse.
Snowflake Aims To Disrupt Data Warehousing
In investing in Snowflake, Sequoia is making a bet that the data warehouse market is ready for a change. With only a small portion of big data projects getting off the ground fingers are pointing at legacy data systems as the problem. These older systems provide companies with limited insight into companies’ data with only a number of users able to access it. Snowflake’s technology gets rid of the obstacles so everyone has limitless access and insight. It happens not only quicker but cheaper, according to Snowflake. "Snowflake is a key enterprise solution for the public cloud. The company's flexible, cloud-built data warehouse enables customers to quickly derive deep insights from their data without the hassle and costs of other, legacy solutions," Sequoia partner Carl Eschenbach said when announcing the investment. With businesses clamoring to make sense of all the data they are collecting, Snowflake’s SaaS offering is proving critical and thus the lofty valuation.
Sequoia Isn’t Done
This isn’t the first investment by the famed venture capitalist firm that blasted on the scene way back in 1972. Mainly a tech investor, the companies it has invested in over the decades command a combined stock market value of $1.4 trillion and include the likes of Apple, Google, Oracle, PayPal, and Yahoo! to name a few. Since 2015 Sequoia has invested in thirty-six SaaS startup companies and has been active in the past few months. In late July it made an investment in Freshworks, the customer engagement software company that secured $100 million in funding. The round was co-led by Accel and Sequoia. In June it led a fundraising round for PatSnap, a provider of research and development analytics. In May Sequoia closed fundraising for its latest investment fund, raising $6 billion to become the largest U.S venture capital fund ever. Bloomberg reported at the time the fund’s total could balloon to $8 billion when all the fundraising is completed providing a large amount of potential firepower for more SaaS company investments.