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March 25, 2014

Hortonworks Snags $100M, Says It’s Worth $1B

Alex Woodie

Hadoop distributor Hortonworks today announced it raised $100 million in its latest oversubscribed round of venture funding. With a total of $225 million raised since Yahoo spun it out in 2011, Hortonworks says it’s now worth more than $1 billion, which its CEO says will figure into M&A activity but won’t interrupt IPO plans for 2015.

These are heady days in the Silicon Valley, as big institutional investors continue to shower billions upon tech startups there–particularly those involved with the big data and analytics space. As the epicenter of the big data movement, Hadoop has been a magnet for massive cash infusions, as we saw just last week when Hortonworks’ competitor Cloudera raked in $160 million to give it a $2 billion valuation.

People were clamoring to be a part of Hortonworks’ latest round, which was managed by BlackRock, the asset management megalith that watches over $4.3 trillion. Rob Bearden, the CEO of Hortonworks, told Bloomberg that the company could have raised twice as much money, but decided to keep the round smaller because its software model doesn’t require hefty expenditures.

The $100 million will be used to continue to develop Hadoop and to expand the company’s reach overseas, Bearden said. “With this funding we will further invest to enable the go-to-market with … key partners and continue to build the roster of HDP certified applications,” the CEO said today in a blog post.

But the money may also fund Hortonworks’ mergers and acquisitions (M&A) strategy, Bearden told Bloomberg, including both big strategic acquisitions, and perhaps smaller tuck-in acquisitions that bolster Hortonworks’ capabilities in a particular area.

Hortonworks is not yet profitable, Bearden told Reuters. But with revenues expected to hit a yearly run-rate of $100-million by the end of the year, the company can’t be too far from the black. Despite the private funding, Hortonworks still plans to go public with an IPO in the first half of 2015, Bearden told Reuters.

This is shaping up to be a good year for all of the Hadoop vendors, as customers begin to move big data projects into full production mode, which often means expanding the number of nodes that Hadoop is running on and purchasing support agreements. Bearden says Hortonworks added 250 new customers in the last year. To support those customers, Hortonworks expects to expand its staff by 40 percent this year, to about 420 employees, Bearden told Bloomberg.

Passport Capital also participated in the latest funding round, as did other investors who participated in previous rounds.

Related Items:

Cloudera Valuation Tops $2B After Latest Funding Round

Hortonworks Levels Up With $50 Million Haul