One year ago, Snowflake launched Snowflake Ventures, an investment arm to help accelerate and augment the growth and adoption of the Snowflake Data Cloud as a strategic platform for data-driven businesses around the globe. By sharing Snowflake’s passion, expertise, and strategic capital with growth-stage players throughout the data ecosystem, Snowflake Ventures aims to help drive mutual value and new use cases for customers. In its first year, the group has made more than a dozen investments representing over $100 million in deployed capital.
“We’re not looking to be kingmakers or overly pick winners in one space rather than another,” Snowflake Ventures’ Head of Corporate Development, Stefan Williams, said. “We want to elevate the conversation on how we can further align our products so that joint customers stand to benefit.”
Snowflake Ventures isn’t your typical venture capital firm. There is no dedicated fund, as Snowflake Ventures invests directly off of the company’s balance sheet. “Our philosophy is centered around making investments that are highly strategic in nature,” Williams explained. “For many of our investments, we’ve actually formalized commercial agreements that tie into better product integrations and go-to-market alignment.”
Snowflake Ventures can generally invest, as a strategic investor, anywhere from $1 million to $20 million, from Series A all the way through IPO, granting great flexibility in the investments it makes. In addition to strategic capital, portfolio companies have benefited from access to and insights from Snowflake leaders and experts, enhanced exposure within the Data Cloud’s ecosystem, go-to-market alignment and Snowflake Partner Network opportunities, and operational guidance on business issues and best practices. And the feedback comes both ways. “Our portfolio companies push us in all the right directions to innovate and move faster. So the relationship is definitely bidirectional,” Williams said.
The resulting economy that is being built on top of the Snowflake platform is driving value for Snowflake customers and new use cases that might not otherwise have existed. For example, Snowflake Ventures’ investment in DataRobot, Dataiku, and Anaconda has helped accelerate data science workloads being powered from within the Snowflake platform, while vertical-based investments such as Habu aim to scale the creation of data clean rooms for advertisers on the Snowflake platform.
Snowflake Ventures sometimes first learns about potential investments through its own teams. This was the case with Hunters, a security operation center platform that Snowflake security teams were using to help detect, investigate, and respond to threats in their environment. Hunters was among the first independent analytics vendors to build its application on top of the Snowflake platform. After making a strategic investment, Snowflake Ventures helped Hunters approach other commercial partners jointly, quickly accelerating its sales cycle and customer growth.
“That’s the biggest thing for any startup: Accelerating the go-to-market and your ability to build partnerships and then scale. The access to Snowflake’s vast customer base has been amazing,” said Uri May, Hunters’ Co-Founder and CEO.
For seed-stage companies, Snowflake Ventures hosts the Snowflake Startup Challenge, now in its second year. In 2021, the contest saw hundreds of applications from over 50 different countries participate. The entrants were narrowed to a shortlist of finalists, with the top three competing live during the Snowflake Summit in front of a panel of judges including Denise Persson, Snowflake’s CMO; Carl Eschenbach at Sequoia; and Mike Speiser at Sutter Hill Ventures for a possible $250,000 convertible note investment. (Learn more about last year’s winner, OverlayAnalytics, here.) The 2022 Startup Challenge is currently accepting applications and has significantly upped the ante: Participants will compete for the chance at an overall pool of $1 million in total investment.
Looking to the future, Williams spoke of the potential for data. “Data itself is becoming an asset,” Williams said. “Companies and partners are starting to think about new incremental revenue streams that data can generate. And what’s really cool with Snowflake and Snowflake Data Marketplace is the ability for customers and partners to seamlessly share and collaborate with data in a way previously not possible, from within Snowflake in a highly secure and governed way. We’re always on the lookout and evaluating different opportunities.”