US-based data analysis software provider Snowflake went public in an initial public offering (IPO) on the New York Stock Exchange, which came along with a $250m investment by enterprise software producer and existing investor Salesforce. Snowflake issued 28 million shares at $120 each, above the $100 to $110 range it had set, after having lifted it from $75 to $85 a share. Salesforce subsidiary Salesforce Ventures and investment holding company Berkshire Hathaway, headed by renown investor Warren Buffett, provided $250m each to Snowflake via a private placement that took place concurrently. On the first day of trading, the stock price surged above $300, giving day traders and HFT algorithms a 150% gain. However, shares pulled back later in the day and closed with nearly 112% gain. The hype around the stock was indubitably attributable to Warren Buffett’s participation in the IPO – something rather rare and much more so when it comes to emerging tech companies which he tends to avoid.
Founded in 2012, Snowflake has developed a cloud software platform which enables users to unify large amounts of data that are siloed in different places, combine them with new data and analyse them in a variety of ways. The company boasts over 3,100 customers and has more than doubled its revenues to $242m in the first half of 2020 with a net loss of $171m. The IPO gave Snowflake a market capitalisation of more than $63bn, a considerable jump from the $12.4bn at which it last raised money, making it the largest software IPO to date.
The company is part of the larger big data tech space, which has not remained outside the radar of corporate venture investors, as the GCV Analytics chart here illustrates. The number of corporate-backed deals from that space has remained fairly stable over the past five years.
