Cockroach Labs is announcing today that it's landed $160 million in a series E funding round, led by Altimeter Capital, with participation from Greenoaks and Lone Pine, as well as previous investors Benchmark, BOND, FirstMark, GV, Index Ventures, and Tiger Global. Cockroach Labs' says this brings its total funding to $355 million at a valuation of $2 billion.
In an interview with ZDNet, Cockroach Labs' CEO, Spencer Kimball, shared his thoughts on the context for this new funding and what it means for the database arena and the cloud. Kimball identified Software as a Service (SaaS -- including Salesforce, Workday, et al), and the data related to it, as the first big wave of cloud progress and adoption. He sees cloud data warehouses/data lakes, and their analytical data, as the second. Now, he sees a third wave emerging: that of operational databases (including CockroachDB) and their transactional data. While pre-cloud behemoths have dominated in the transactional/operational database area for decades, Kimball identifies the operational database heirs apparent as "post-Oracle, cloud-native, relational databases."
OLTP: Cloudy, sticky
Operational databases are critical to running enterprise applications, so a necessary catalyst for the popularity of cloud-based operational databases is enterprise adoption of the public cloud. That's been a long time in coming, but it's definitely here. As anecdotal evidence of that adoption, Kimball mentioned that, at one time, Jamie Dimon, CEO of Cockroach customer JPMorgan Chase, said the company would never be in the public cloud. Now, not only does it have assets there, but the company actually bestowed its coveted Hall of Innovation award on CockroachDB, despite the database's cloud-native architecture and major public cloud availability.
Kimball mentioned that the database business is a "sticky" one. It takes a lot of effort to get customers to re-platform onto a new database; once they do, however, they tend to stick around for a long time, and their adoption can grow rapidly. Kimball sees this as a good omen for Cockroach Labs' annual run rate (ARR).
The dev-apps-db collective
Cockroach will be using much of the new funding for developer enablement and for providing a perpetually free tier of service for development, test and evaluation use. While that may be costly for the company, it allows developers to stop reading about Cockroach and to start using it, without obstacle. And winning over developers, who may be short on budget but highly influential in platform and purchase decisions, through such hands-on experience, is key winning over new customers.
Last week, Starburst Data announced a $100M Series C funding round and Dremio announced a $135M Series D round. With today's announcement of Cockroach's $160M Series E round, the data space is on a funding roll. Given Snowflake's juggernaut IPO last September, this shouldn't come as a surprise. And it all just proves out something I've insisted since the 1990s: every business software application is a database application.
- Starburst secures $100M series C financing
- Data lake-focused Dremio raises $135M series D funding round
Brust is an analyst for GigaOm, of which Cockroach Labs is a client.