- Snowflake has reportedly filed confidential paperwork for an IPO and is aiming for a $20 billion valuation, according to the Financial Times. Snowflake has declined to comment.
- The cloud data warehousing company is one of the hottest startups in tech. “It’s going to be the blockbuster enterprise listing for 2020,” Constellation Research analyst Ray Wang told Business Insider.
- Here are 5 reasons Snowflake has drawn much attention in the tech world — from its
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Snowflake is reportedly planning to go public in what could be one of the most closely watched trading debuts in tech this year.
The Silicon Valley startup has submitted paperwork for a confidential initial public offering with the Securities and Exchange Commission, according to the Financial Times.
Snowflake is aiming for a valuation of as high as $20 billion, the report said. The company just raised $479 million in February at a $12.4 billion valuation. In total, Snowflake has raised $1.4 billion from investors including Sequoia and ICONIQ Capital.
“It’s going to be the blockbuster enterprise listing for 2020,” Constellation Research analyst Ray Wang told Business Insider. “Investors are looking for winners on cloud and analytics.”
Here are 5 reasons Snowflake’s reported plan to go public is getting the tech world excited:
Snowflake dominates a new, hot market: Cloud data warehousing.
Snowflake was founded in 2012 by Benoit Dageville, Marcin Zukowski, and Thierry Cruanes. It came of stealth mode only in 2014, but it quickly became a hot startup for addressing a critical business problem: how to efficiently store and manage massive amounts of data in the cloud.
The cloud enabled businesses set up networks on web-based platforms run by the likes of Amazon Web Services, Microsoft and Google. But for many businesses who embraced cloud computing, managing their data in the cloud proved to be a challenge.
Snowflake “hit the market at exactly the right time,” Gartner senior director analyst Adam Ronthal told Business Insider last year.
“When Snowflake first launched they launched in a world where there was a fair amount of dissatisfaction” with the data warehousing technologies, he said. “Snowflake came along and said, ‘If you’re struggling with these things, we can address that for you.’ And they could.”
Former CEO Bob Muglia left suddenly after saying an IPO is not imminent.
Snowflake stunned the tech world last year when it announced the sudden departure of CEO Bob Muglia.
Muglia, who was named CEO shortly before the startup came out of stealth mode in 2014, is a veteran executive who once served under Bill Gates and Steve Ballmer at Microsoft. He stepped down at Snowflake not long after saying in a media interview that he didn’t plan to pursue an IPO for another year or two.
Muglia was replaced by Frank Slootman, the current CEO, who rejected the notion that the interview was the reason for his predecessor’s exit, calling it “the dumbest thing I’ve ever heard.”
“That is not how boards operate or how they think,” Slootman told Business Insider in an interview last year. “CEO transitions are extremely difficult. They’re risky. They’re absolutely the last resort. You don’t do this because somebody had a bad interview. It’s absurd.”
Slootman also said at the time that Snowflake could go public within three years.
CEO Frank Slootman left ServiceNow partly because it became focused on “social justice issues.”
Snowflake CEO Frank Slootman is a Silicon Valley veteran who previously led two successful tech IPOs.
He was CEO of Data Domain, the data storage company which went public in 2007 and is now owned by Dell. Before Snowflake, he was CEO of ServiceNow, the cloud software giant which went public in 2012.
Slootman left ServiceNow in 2017 partly because the fast-growing software behemoth was expanding its focus beyond the business of tech.
“They started caring about things that I had no interest in,” he told Business Insider in a 2019 interview. “You’ve got all the social justice issues and all the politics that go with that.”
He was critical of political and social activism at tech companies, such as the protests launched by Google employees who complained about the work the company was doing for the Federal government.
“I cannot possibly handle that kind of conversation,” Slootman said. “You go somewhere else if you want that conversation.”
Slootman expects that Snowflake partners Amazon and Microsoft will one day be his rivals
Snowflake rapidly became dominant in cloud data warehousing largely because it forged partnerships with the giants of the cloud, Amazon, Microsoft and Google.
But the cloud giants also offer cloud storage products that compete directly with Snowflake. In fac, CEO Frank Slootman says the cloud market could change dramatically in a way that could hurt smaller players like Snowflake.
“There is one giant elephant in the room,” Slootman told Business Insider last year. “That is that the [main] cloud players are also our competitors.”
Slootman was speaking from experience. He said he has seen how dominant tech companies eventually try to “suffocate” smaller players, through intense take-no-prisoners competition or acquisitions.
“Microsoft did it. IBM did it. They all do it. It’s innate. It’s not good for them, but they can’t help themselves. For the cloud era, that is going to be a dynamic that every company will face.”
“I’m a huge customer of Amazon and at the same time, they are a huge competitor, so it’s a very interesting dynamic,” he said. “Microsoft is trying to make up ground so they are very partner-friendly right now. But does Microsoft have the same homicidal impulses as Amazon? Yes they do.”
Slootman wants to be known as a no-nonsense, effective leader, in the style of General George Patton.
The tech world full of top executives and pioneering entrepreneurs who looked up to the industry’s iconic figures, including Steve Jobs, Bill Gates and Larry Ellison.
Snowflake CEO Frank Slootman’s idol is George Patton, the legendary World War II general. This explains his direct, no-nonsense leadership style in business. Slootman actually helped recruit John Donahoe, who once led eBay, to succeed him at ServiceNow. (Donahoe recently left to lead Nike and has since been replaced by former SAP CEO Bill McDermott.)
Slootman compared Donahoe to Dwight Eisenhower, another US general who later became president.
“He is the Eisenhower. I’m the Patton,” he told Business Insider last year. “Eisenhower was a politician. He tried to please a lot of people.” He added: “Patton just wanted to kill Germans and he wanted to get to Berlin first.”