DataStax Nabs $106 Million, Sets Sites on International Expansion
DataStax, the company behind the NoSQL database Apache Cassandra, today announced it has brought in $106 million in new financing, bringing its total financing figure to $190 million. Much of the Series E round will go toward expanding DataStax’s international presence, particularly in Asia, company executives say.
“Things are definitely good,” Matt Pfeil, co-founder and chief customer officer at DataStax, told Datanami in an interview this week. “We’ve got over 25 percent of the Fortune 100 as customers, and more than 400 customers around the world in 50 countries.”
That international presence is set to grow as DataStax plans to use much of the cash on overseas expansion. “We expanded in the EU last year. We’re in London and Paris and Germany now. We’re going to expand that and open up Asia,” said Jonathan Ellis, co-founder and CTO for the software company.
DataStax has grown quickly since former Rackspace engineers Ellis and Pfeil founded the company just four years ago. Over the past 12 months, it’s been in hyper-growth mode. During that period, it more than doubled the number of employees to more than 350, and it increased its annual revenue run rate by more than 125 percent. “The valuation of the company is over $830 million, which is more than double the valuation of the company 12 months ago,” Pfeil said.
The privately held company doesn’t share revenue figures. At this point, profitability plays second fiddle to growth. Pfeil pointed out that the transactional database market is over $30 billion per year. “That’s obviously a gigantic market so re-investing every penny is part of our recipe for long-term success,” he said.
NoSQL databases currently account for a slim fraction of that $30 billion market. Forrester sees the NoSQL market hitting the $1-billion mark in 2017, at which point we may see one or more NoSQL database vendors with revenues in excess of $100 million. MongoDB and Couchbase, along with DataStax, appear to be best positioned NoSQL vendors to hit that milestone.
While industry observers see a three-horse NoSQL race shaping up in DataStax, MongoDB, and Couchbase–which to date have recorded the bulk of venture capital, with $115 million going to Couchbase and $231 million to Mongo–NoSQL vendors usually point to Oracle as the main competition. Oracle is the king of the mountain in the relational database world, as it owns the top two databases, Oracle 12c and MySQL.
When NoSQL databases came on the scene several years ago, they were initially used to build Web and mobile apps, where relational databases had struggled. But now NoSQL databases are gaining traction in more traditional application markets, as well as filling the need for a new class of applications that blend transactional and analytic requirements.
As Ellis sees it, the playing field is shifting in favor of NoSQL databases, which offer greater out-of-the-box scalability and schema flexibility than their relational cousins. “We’re at the beginning of a whole new market, a whole new wave of data-centric Internet applications,” he says.
For example, DataStax recently worked with a retailer that replaced its point of sale (POS) system with a new POS system backed by Cassandra. In addition to processing debit and credit card transactions, the application has a built-in recommendation system that pushes purchase suggestions to consumers via mobile apps.
“So when I’m at home and run out of Cheerios I can scan that package and it will instantly go to their Cassandra servers and [generate an offer] to buy these juice boxes or get $1 off the next package of Cheerios you buy,” Ellis said. “So there’s a real-time contact and feedback with your customer that you can enable with this technology. We call that smart transactions. [It’s about] enabling that new level of personalization and customization for the next generation of applications.”
These next-gen apps fall into five main categories, including: Personalization and recommendations; catalogs and playlists; fraud detection and risk analysis; messaging applications; and Internet of things. “As we’ve seen this requirement to use data in effective ways to make the user experience better, we’re seeing it penetrate more traditional market verticals,” Pfeil said.
Along with their lack of SQL constructs, the lack of strong consistency for transactions is usually cited as one of the bigger weaknesses of the NoSQL framework. But as Ellis explains, when you consider that NoSQL databases often trade strong consistency for higher availability–maintaining equilibrium in the CAP Theorem in the process–then you understand that support for eventual consistency in NoSQL databases is usually good enough.
“We’ve got lot of experience helping people understand how to develop applications without the ACID compliance that you’d have with a traditional relational database,” Ellis said. “The reason is that as you move to these larger scale applications, you need to distribute your data across multiple machines, you have to give up ACID. It’s not an option really. So the question is then, given that if I need to give up ACID, how do I build my application anyway?”
In addition to international expansion, some of the $106 million will go toward R&D. To that end, the company will look to Apache Spark to build powerful analytic functions into Cassandra-based apps. Earlier this year, DataStax partnered with Spark backer Databricks, and announced support for running Spark in the NoSQL database.
“You’re going to see the Spark and Databricks community doing more on Cassandra from their end, as well as us doing more with Spark on the Cassandra side,” Ellis said. “They really are good complements to each other. It’s so much simpler if I can just ask a question….without having to do a big ETL job into my Hadoop data warehouse. If I can answer that directly from my Cassandra cluster, so much the better.”
The Series E round was led by legendary Silicon Valley VC firm Kleiner, Perkins, Caulfield & Byers and included an investment syndicate that consisted of ClearBridge, Cross Creek and Wasatch, which collectively manage over $100 billion in mutual funds. PremjiInvest and Comcast Ventures are new investors in the company, while existing investors, such as Lightspeed Venture Partners and Scale Venture Partners, and participated in the latest round.