From stealth mode to data cloud pioneer: a look at Snowflake’s history, key members, major achievements, and future

In this series of ai.nl, we feature the most promising AI companies in the world: where do they come from, what have they achieved and what are their plans for the future. In this episode, we are looking at Snowflake, a California-based cloud data platform offering data warehouse-as-a-service designed for the cloud.

On September 16, 2020, Snowflake debuted on the New York Stock Exchange and surged more than 111 per cent. This was the largest software IPO ever and the stock began trading at $245 per share and closed at $253.93. Ahead of the listing, Snowflake had priced its shares at $120, which was higher than the $100-$110 price band and a bump from the initial price range of $75 to $85.

The listing was not only a watershed moment for Snowflake, which was founded in 2012 but came out of stealth only in 2014, but also for the larger cloud-based software services industry. The story of Snowflake is about the growth of cloud-based software services vendors alongside public cloud vendors.

Experts at the helm

Snowflake Inc. was founded in July 2012 by three data warehousing experts: Benoit Dageville, Thierry Cruanes and Marcin Żukowski. Before starting Snowflake, Dageville and Cruanes worked as data architects at Oracle Corporation while Żukowski co-founded a Dutch startup named Vectorwise. Sutter Hill Ventures was one of the earliest investors in the company and led the $5M Series A in August 2012.

Mike Speiser, a venture capitalist at Sutter Hill Ventures, served as the first CEO of the company. In June 2014, the company appointed Bob Mulgia, a former Microsoft executive, as CEO and raised $26M in Series B round led by Redpoint Ventures in October 2014.

With the Series B, Snowflake announced it is coming out of stealth mode and that it was being used by 80 organisations. This began the journey of Snowflake becoming a dominant player in the cloud-based software services industry.

Over the next six years, Snowflake raised a lot of money as it continued to add more customers and expanded its offering. The company also announced in May 2019 that retired CEO of ServiceNow, Frank Slootman, will join as CEO while Michael Scarpelli, former CFO of ServiceNow, became CFO. Soon after their joining, Snowflake raised $479M in the form of Series G in February 2020 at a valuation of $12.4B.

Snowflake: key members

  • Frank Slootman (Chairman and Chief Executive Officer)
  • Benoit Dageville (Co-Founder & President of Product)
  • Mike Scarpelli (Chief Financial Officer)
  • Chris Degnan (Chief Revenue Officer)
  • Denise Persson (Chief Marketing Officer)
  • Shelly Begun (Chief Human Resources Officer)
  • Thierry Cruanes (Co-Founder & CTO)
  • Sunny Bedi (Chief Information & Data Officer)
  • Christian Kleinerman (SVP, Product)
  • Greg Czajkowski (SVP, Engineering and Support)
  • Derk Lupinek (General Counsel)

Unique in the world of big data

From the time it came out of stealth mode, Snowflake had carved a niche for itself in the world of big data. While companies have been offering cloud platforms as an infrastructure to their customers, however, not every company knows how to work with the data they have on their cloud platforms.

Snowflake offers a solution to this problem in the form of its cloud-based data service called a data warehouse. The easiest way to imagine Snowflake is to think of a data platform that is able to harness the power of the cloud. The uniqueness is in function and also in the name. The whimsical company name essentially relates to the shared love of skiing of its co-founders.

Snowflake counts the likes of Lime, Capital One, Rent the Runway, and Adobe, among its clients. The data warehouse solution offered by Snowflake is used by these companies to not only store all their data but also to analyse it. This analytics part is the unique selling point of Snowflake since it allows businesses to make better decisions.

Another way Snowflake is unique is in the way it is built. While most data warehouse solutions are built on top of free open-source big data service called Hadoop or retrofitted to work on the cloud, Snowflake is built with the cloud in mind. It was initially hosted on Amazon Web Services before switching to Microsoft Azure in 2018. The platform has been run on the Google Cloud Platform since 2019 and was ranked first on the Forbes Cloud 100 list in 2019.

Former CEO Bob Muglia told Fortune that cloud-based data warehouses are useful since they are not limited by the constraints of a company’s own data centres. Another way it is unique is in the offering of its service. Snowflake offers a complete solution as opposed to offering only the data-processing technology and asking customers to build data services around it.

Snowflake: timeline of key events

  1. July 2012: Founded by Benoit Dageville, Thierry Cruanes and Marcin Żukowski
  2. August 2012: $5M Series A funding round led by Sutter Hill Ventures
  3. June 2014: Bob Mulgia joins as CEO
  4. October 2014: $26M Series B funding round led by Redpoint Ventures
  5. June 2015: $79M Series C funding round led by Altimeter Capital
  6. Sept 2017: $105M Series D funding round led by ICONIQ Capital
  7. January 2018: $263M Series E funding round led by ICONIQ Capital, Altimeter Capital, Sequoia Capital
  8. October 2018: $450M Series F funding round led by Sequoia Capital
  9. May 2019: Frank Slootman joins as CEO and Michael Scarpelli becomes CFO
  10. Feb 2020: $479M Series G funding round led by Dragoneer Investment Group, Salesforce Ventures
  11. September 2020: Snowflake becomes a public company with an IPO raising $3.4B
  12. May 2021: Snowflake becomes headquarterless and adds an executive office in Bozeman, Montana

Challenging tech giants

Since its inception, Snowflake has been a company that has co-opted to work with big tech giants like Oracle and Microsoft instead of challenging them. However, that changed last year when Snowflake revealed its intent to become more than a data cloud where customers store and analyse their own data. It is instead looking to host business software and data sets that customers can tap whenever they want.

“Our end game is to build a massive data cloud where anybody with a Snowflake account is plugged in,” CEO Frank Slootman told Fortune.

It is a known fact that the data industry sees Snowflake as the next big thing. The cloud-database business has been growing for several quarters and reported product revenue of $394.4M during the first quarter of fiscal 2023. The company also announced having a total of 6,322 customers but it has also seen a lot of volatility surrounding its stock.

Priced at $120 in the IPO, Snowflake peaked at $429 but is now trading at $113.87 with a market cap of $36.22B. It is also facing competition from the likes of MongoDB and Databricks in the world of big data. The silver lining for Snowflake is the fact that a number of companies are moving away from legacy players like Oracle and Microsoft and when they do plan to take their data to the cloud, Snowflake is well placed to help them make the leap.

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