Snowflake Computing announced today that it raised a massive $263 million round of funding to propel its cloud data warehouse business forward for the next several years. It’s now valued at $1.5 billion.
Snowflake Computing announced today that it raised a massive $263 million round of funding to propel its cloud data warehouse business forward for the next several years. It’s now valued at $1.5 billion.
The company sells database software that runs in Amazon’s cloud and provides businesses with a high-performance, highly scalable environment to store massive amounts of information for processing by a range of applications, including machine learning algorithms.
The company was founded in 2012, and this latest brings Snowflake’s total funding to $473 million, putting it among an elite group of startups that have taken on a massive infusion of cash over a short lifespan. Snowflake’s previous round of funding, worth $100 million, closed just last year.
Iconiq Capital, Altimiter Capital, and Sequoia Capital co-led the round. Returning investors Capital One Growth Ventures, Madrona Venture Group, Redpoint Ventures, Sutter Hill Ventures, and Wing Ventures also participated.
Snowflake CEO Bob Muglia said in an interview with VentureBeat that investors recommended the company raise money to fuel its business, given the success it’s having and the speed at which the market is moving.
“With this financing, we now have the financial strength that’s now coupled with the technical strength, and the product strength, and the people strength that we have at Snowflake,” Muglia said. “And we can bring the whole package together and solve problems for customers.”
This round also provided an opportunity to bring Sequoia Capital on as an investor. Muglia said that he wanted to work with the firm because of its long and storied pedigree in venture capital, as well as its track record helping enterprise software startups.
With all this cash in the bank, Muglia said the company plans to expand its sales and marketing presence overseas, with a special focus on Europe and Asia. And he doesn’t expect to be going on an investor roadshow anytime soon, as this funding should last for a couple of years while the company continues to grow and scale its business.
Even with this eye-popping raise, Snowflake had more money left on the table. Muglia said that the round was “tremendously oversubscribed” and that he was still getting requests from investors interested in joining the round just days prior to its official announcement.
Now Snowflake needs to live up to its valuation and make good on all the capital investors have poured into the company. Its customer base has grown 300 percent over the past year, and it’s working in a hot space, which explains the excitement. But still, this is a high bar for Snowflake to hit.
In the near future, the company is also working to expand its reach to other cloud providers. While Muglia didn’t say which companies would play home to new Snowflake regions, broadening the number of platforms that customers can use to host their data is part of the plan. That, in turn, will open the startup to new customers, since some companies will choose not to run workloads on Amazon Web Services.
