41 ms·

> this latest round brings Snowflake’s total funding to $473 million Absurd. When I see deals this large, especially in enterprise software, it raises alarm be

> this latest round brings Snowflake’s total funding to $473 million Absurd. When I see deals this large, especially in enterprise software, it raises alarm bells. It seems likely there are at least a few “quid pro quos” involved here. When your customers and investors overlap and run in the same circles, it’s hard to avoid the nepotism inherent in that world. The board members, investors, and customers are probably all executives at the same 50-100 companies. They have the power to purchase the product (demonstrating growth), invest in the product (demonstrating increasing valuation), and then acquire the product at a multiple of what they invested in it for. I also wonder how much the founders are controlling, or if this is a case like Box where the founder owns <10% and the rest of the huge valuation is spread across dozens of different investors.

shaqbert 9y ago
Actually, it is quite the opposite. Once an enterprise software company has crossed the $40m revenue threshold, has low churn, and growth is >2x, you got yourselves a winner. Now Snowflake has grown 3x over consecutive years, and with all these big enterprises coming in, there has gotta be a true advantage. Now the question is if this current advantage can survive an upgrade of say e.g. the capabilities of Amazon Redshift, that moves the latter to almost feature parity.
exabrial 9y ago
My first thought about reading that article too. I'm suspect of this submission to HN actually; usually, tech news that's submitted here is very detailed in the algorithms and "how" things work. This article reads like a press release watered down for investors.
btown 9y ago
While there certainly is some overlap, the investors in this round were venture capital most likely funded by institutional capital such as pension funds and endowments, rather than corporations who might be clients: see http://www.theequitykicker.com/2010/12/01/where-do-vcs-get-their-money-from/ http://www.theequitykicker.com/2010/12/01/where-do-vcs-get-t... . And as of earlier this year they counted 450 unique customers: https://techcrunch.com/2017/04/05/snowflake-rakes-in-100-million-series-d-led-by-iconiq/ https://techcrunch.com/2017/04/05/snowflake-rakes-in-100-mil... So the extent of self-dealing is limited. IMO, every company in every industry will need data warehousing at some point in their growth, if they are to survive in the modern world. It's difficult to get right, and Redshift is far from a white-glove experience for those attempting to navigate the space. Compared to B2C deals of this magnitude, this is significantly more sane.

shaqbert 9y ago

Actually, it is quite the opposite. Once an enterprise software company has crossed the $40m revenue threshold, has low churn, and growth is >2x, you got yourselves a winner. Now Snowflake has grown 3x over consecutive years, and with all these big enterprises coming in, there has gotta be a true advantage. Now the question is if this current advantage can survive an upgrade of say e.g. the capabilities of Amazon Redshift, that moves the latter to almost feature parity.

exabrial 9y ago

My first thought about reading that article too. I'm suspect of this submission to HN actually; usually, tech news that's submitted here is very detailed in the algorithms and "how" things work. This article reads like a press release watered down for investors.

btown 9y ago

While there certainly is some overlap, the investors in this round were venture capital most likely funded by institutional capital such as pension funds and endowments, rather than corporations who might be clients: see http://www.theequitykicker.com/2010/12/01/where-do-vcs-get-their-money-from/ http://www.theequitykicker.com/2010/12/01/where-do-vcs-get-t... . And as of earlier this year they counted 450 unique customers: https://techcrunch.com/2017/04/05/snowflake-rakes-in-100-million-series-d-led-by-iconiq/ https://techcrunch.com/2017/04/05/snowflake-rakes-in-100-mil... So the extent of self-dealing is limited. IMO, every company in every industry will need data warehousing at some point in their growth, if they are to survive in the modern world. It's difficult to get right, and Redshift is far from a white-glove experience for those attempting to navigate the space. Compared to B2C deals of this magnitude, this is significantly more sane.