BigData Unicorns Valuation
The companies behind the massive investment flow
“There were five exabyte of information created between the dawn of civilisation and 2003. That much data is now created every 2 days”
— Eric Scmidt, Google, 2010
“Unicorns” are companies valued at over $1 billion by private market investors. We’ve been talking about unicorns for almost two years now. According to CB Insights latest ranking of unicorns companies, there are 143 firms currently valued at over $1B. 14 of them are BigData companies. BigData is the term used to describe our ability to make sense of the ever-increasing volumes of data in the world. More than “the next big thing” as we use to talk about them not so long ago, BigData companies are actually The big thing right now, alongside with Fintech companies, to disrupt the B2B market. They bring a profound change to the way the economie makes decisions.
To picture the trends of this sector, let’s take a closer look at a few of them to understand who they are, what they provide and how much cash is injected in that industry
Palantir Technologies
Palantir is probably an exception among the others. The company builds software platforms that help human experts perform powerful, collaborative analysis of data at scale. This secretive startup’s software is deployed at public institutions (notably the NSA, the CIA…), private enterprises (Wall Street Banks such as JPMorgan), and in the non-profit sector to address the challenges of responsibly making sense of complex, diverse data.
In terms of valuation, the Palo Alto firm is a beast among the unicorns : Palantir’s last Mezzanine round in October 2015, added a $150M to the $1.52B already raised in the last 16 rounds … its valuation is estimated around $20B, which is the biggest valuation after Uber, Xiaomi and AirBnb
Cloudera
Founded in 2008 by three engineers from Google, Yahoo and Facebook, Cloudera enables data driven enterprises to easily extract business value from all their structured and unstructured data. Cloudera also offers consulting services, training and certification on Apache technologies (open source software for distributed computing). The Californian firm is also first in the highest paying unicorns ranking, with a median salary coming over $142,000 (more details here)
So far, Cloudera raised $1.04B in 8 Rounds from 18 Investors, among them Google Ventures, and is valued over $4B. Yes it’s huge.
Uptake
Uptake, a predictive analytics company, empowers global companies to optimize performance and reduce failure of assets. Leveraging unique partnerships this companie manages to integrates cross-industry expertise, data science, and workflow connectivity to build high-value solutions based on massive data sets. The result is a platform that identifies problems before they happen and delivers refined insights to drive unparalleled efficiency and productivity
The Chicago-based startup is a unique case : founded in 2014, Uptake is one of the last and youngest startup to have joined the so-called “unicorns club” thanks to a $45M round in October this year led by GreatPoint Ventures, at a valuation over $1B
MongoDB
MongoDB is a next-generation database that helps businesses transform their industries by harnessing the power of data. The world’s most sophisticated organizations, from SMEs to the largest companies, use MongoDB to create applications never before possible at a fraction of the cost of old databases. MongoDB is the fastest-growing database ecosystem, with over 10 million downloads and thousands of customers.
Since 2008, MongoDB raised a total of $311.1M. Led by Intel Capital, Salesforce Ventures and Union Square Ventures, its last Series G round in January 2015, raised $80M at a $1.6B valuation
MuSigma
MuSigma is a leading provider of decision sciences and analytics solutions, helping companies institutionalize data-driven decision making. Mu Sigma has disrupted the analytics industry by integrating the disciplines of business, math, and technology in a sustainable global delivery model
In January 2013, after $132M already raised, Sequoia Capital and General Atlantic added $45M which took the company over the $1Billion valuation milestone.
InsideSales
InsideSales.com offers the sales industry a comprehensive sales acceleration platform that creates high-performance sales teams with breakthrough technology. From the moment an opportunity enters the sales funnel until it closes, InsideSales leverages machine learning to predict and prescribe optimized sales activities and enhance performance
Last Series D round in March, added $60.65M at a $1.5B valuation, taking the amount of money raised so far to $201.2M in 4 rounds. Leading investor was, not suprisingly, Salesforce Ventures
SimpliVity
SimpliVity was established in late 2009 with the humble mission of simplifying IT. Their last technology powers a new assimilated, IT infrastructure platform and provides enterprise computing, storage services and network functionality, creating a massively scalable pool of shared resources, and enabling efficient data movement, scalability, and enterprise class system availability
With the latest investment, involving Accel Partners or Swisscom Ventures, SimpliVity’s total lifetime funding now exceeds $175 million and is valued over one Billion dollar.
Nutanix
Founded in 2009, Nutanix was the first company to offer a radically simple compute and storage infrastructure for implementing enterprise-class virtualization without complex and expensive network storage
The firm raised $312.2M in 5 Rounds from 11 Investors notably Battery Venture
In August last year Nutanix closed a $140M Series E deal at a $2B valuation
What can be learned ?
Thus, trending topics in BigData are matters like storage infrastructure, data analysis that derive business value, or predictive analytics tools that can identifie problems before they happen.
BigData companies are supporting data-driven decision makers by harnessing the power of data in service of decision sciences and analytics solutions. Now you have to ask the right questions. All this lies in machine learning.
The underlying algorithms that run our social media and make them successful and fun — the ones that suggest new content you might like based on things you’ve liked before, for example — are an example of big data at its finest. But the biggest application of this science today are analytics for Business Services, also known as Business Intelligence.
“big data is not about the data”
— Gary King, Harvard University, making the point that while data is plentiful and easy to collect, the real value is in the analytics
BigData is well represented in the unicorns club with the fourth largest presence :
Among all the BigData Unicorns, only one, MuSigma (India) is not from the US. Today, American companies still represent 64% (91 out of 143) of all unicorns, but the breakthrough of Asian startups in that ranking is indeniable and no longer a surprise.
We can notice the strong presence of Sequoia Capital who invested in 3 of the BigData unicorns as well as 20 unicorns… Seems that the californian VC has an eye for good opportunities. Still not a surprise…
The cumulative valuation of BigData unicorns is $40B, a growing share of 8% among the insane $507B total cumulative valuation for unicorns
Do all these eye-popping valuations really reflect the intrinsic value of these companies ? Well, such companies’ valuations is, to some extend, more understandable because of their business model, based on subscription/license, is better able to secure financial stability ; they actually generate revenue or sell a product unlike unicorns companies like Snapchat or others who are being pinpointed by giant institutions (more details here). BigData companies (but not exclusivly) are diversified in their customer base : instead of 20% of the customers providing 80% of the revenue, it is more around 60%/80%. This model is much less sensitive to customer volatility.
Salesforce founder and angel investor Marc Benioff, speaking about unicorns satrtups, claims that “they are making a huge mistake. They are waiting too long to go public.”
According to him, it’s a trap. Benioff says that starup should trust the public market more and earlier. For him, the trap lies in the fact that if they raise to much money, they can’t go public because their last valuation would be higher than their public valuation. Well, Square just did…
More generally, some still claim the proliferation of unicorns is a sign of a new Tech bubble but I’ll let my friend William bring some light on this :
In a recent article in Fortune on the future of technology Marc Andreessen presented his answer to …www.linkedin.com
BigData startups grow the skills able to cope with the new challenges brought by the growth of the Internet of Things market who, according to estimations by the McKinsey Global Institute, will have a total economic impact of up to $11 trillion by 2025. (more fact about IoT here)
At the moment less than 1% of all data is ever analysed and used, just imagine the potential here.
“big data is at the foundation of all the megatrends that are happening today, from social to mobile to cloud to gaming”
— Chris Lynch, Vertica systems
Sources : Crunchbase, VentureProfile, Pitchbook, CBInsights, Techcrunch