Materialize scores $40 million investment for SQL streaming database

Materialize, the SQL streaming database startup built on top of the open source Timely Dataflow project, announced a $32 million Series B investment today led by Kleiner Perkins with participation from Lightspeed Ventures.

While it was at it, the company also announced a previously unannounced $8 million Series A from last year that had been led by Lightspeed, bringing the total raised to $40 million.

These firms see a solid founding team that includes CEO Arjun Narayan, formerly of Cockroach Labs, and chief scientist Frank McSherry, who created the Timely Flow project on which the company is based.

Narayan says that the company believes fundamentally that every company needs to be a real-time company and it will take a streaming database to make that happen. Further, he says the company is built using SQL because of its ubiquity, and the founders wanted to make sure that customers could access and make use of that data quickly without learning a new query language.

“Our goal is really to help any business to understand streaming data and build intelligent applications without using or needing any specialized skills. Fundamentally what that means is that you’re going to have to go to businesses using the technologies and tools that they understand, which is standard SQL,” Narayan explained.

Bucky Moore, the partner at Kleiner Perkins leading the B round sees this standard querying ability as a key part of the technology. “As more businesses integrate streaming data into their decision making pipelines, the inability to ask questions of this data with ease is becoming a non-starter. Materialize’s unique ability to provide SQL over streaming data solves this problem, laying the foundation for them to build the industry’s next great data platform,” he said.

They would naturally get compared to Confluent, a streaming database built on top of the Apache Kafka open source streaming database project, but Narayan says his company uses straight SQL for querying, while Confluent uses its own flavor.

The company still is working out the commercial side of the house and currently provides a typical service offering for paying customers with support and a service agreement (SLA). The startup is working on a SaaS version of the product, which it expects to release some time next year.

They currently have 20 employees with plans to double that number by the end of next year as they continue to build out the product. As they grow, Narayan says the company is definitely thinking about how to build a diverse organization.

He says he’s found that hiring in general has been challenging during the pandemic, and he hopes that changes in 2021, but he says that he and his co-founders are looking at the top of the hiring funnel because otherwise, as he points out, it’s easy to get complacent and rely on the same network of people you have been working with before, which tends to be less diverse.

“The KPIs and the metrics we really want to use to ensure that we really are putting in the extra effort to ensure a diverse sourcing in your hiring pipeline and then following that through all the way through the funnel. That’s I think the most important way to ensure that you have a diverse [employee base], and I think this is true for every company,” he said.

While he is working remotely now, he sees having multiple offices with a headquarters in NYC when the pandemic finally ends. Some employees will continue to work remotely, but the majority coming into one of the offices.


By Ron Miller

Open-source leader Confluent raises $125m on $2.5b valuation

Confluent, the commercial company built on top of the open source Apache Kafka project, announced a $125 million Series D round this morning on an enormous $2.5 billion valuation.

The round was led by existing investor Sequoia Capital with participation from Index Ventures and Benchmark, who also participated in previous rounds. Today’s investment brings the total raised to $206 million, according the company.

The valuation soared from the previous round when the company was valued at $500 million. What’s more, the company’s bookings have scaled along with the valuation.

Graph: Confluent

 

While CEO Jay Kreps wouldn’t comment directly on a future IPO, he hinted that it is something the company is looking to do at some point. “With our growth and momentum so far, and with the latest funding, we are in a very good position to and have a desire to build a strong, independent company…” Kreps told TechCrunch.

Confluent and Kafka have developed a streaming data technology that processes massive amounts of information in real time, something that comes in handy in today’s data-intensive environment. The base streaming database technology was developed at LinkedIn as a means of moving massive amounts of messages. The company decided to open source that technology in 2011, and Confluent launched as the commercial arm in 2014.

Kreps, writing in a company blog post announcing the funding, said that the events concept encompasses the basic building blocks of businesses. “These events are the orders, sales and customer experiences, that constitute the operation of the business. Databases have long helped to store the current state of the world, but we think this is only half of the story. What is missing are the continually flowing stream of events that represents everything happening in a company, and that can act as the lifeblood of its operation,” he wrote.

Kreps pointed out that as an open source project, Confluent depends on the community. “This is not something we’re doing alone. Apache Kafka has a massive community of contributors of which we’re just one part,” he wrote.

While the base open source component remains available for free download, it doesn’t include the additional tooling the company has built to make it easier for enterprises to use Kafka.
Recent additions include a managed cloud version of the product and a marketplace, Confluent Hub, for sharing extensions to the platform.

As we watch the company’s valuation soar, it does so against a backdrop of other companies based on open source selling for big bucks in 2018 including IBM buying Red Hat for $34 billion in October and Salesforce acquiring Mulesoft in June for $6.5 billion.

The company’s most recent round was $50 million in March, 2017.


By Ron Miller