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July 16, 2015

Despite Startup Slowdown, VCs Keep Investing in Big Data

Alex Woodie

The number of software startups is down almost 50 percent since the start of the Great Recession, according to a new report from Evan’s Data Corp. Despite the slowdown, anecodocal evidence points to venture capital firms continuing to invest in big data analytics.

According to the latest Developer Population and Demographics study from IT research firm Evan’s Data, the percentage of new software startups decreased by 49 percent since 2009.

“We’re obviously still seeing the effects of the great recession that started in 2008,” said Janel Garvin, CEO of Evans Data. “It’s much less visible due to the excitement and growth around Silicon Valley, and the release of new technologies that capture everyone’s imagination, but the reality is in the numbers. The recovery has been very weak in real terms and this shows in the large decrease in new software companies during the last five years.”

As Garvin alluded to, the Silicon Valley is currently in the midst of a second Dot Com Boom, which is being driven largely by three related technologies, including mobile computing, cloud computing, and big data analytics. While the overall software industry may be suffering from a case of the blues, these areas continue to have a hot hand, and are attracting investments—some of them quite large.

Venture capital activity is booming in the overall software sector, according to PriceWaterhouseCooper’s latest “MoneyTree” report. During the first quarter of 2015, venture capitalists invested $5.6 billion in the software industry, which accounted for more than 40 percent of all VC activity across all sectors.

MoneyTree_3

VC investment in software is nearing levels not seen since the Dot Com Boom, according to PWC’s MoneyTree report

That amount was down slightly from the fourth quarter of 2014, when VCs invested $6.0 billion in software firms. The fourth quarter capped an epic year in VC investment in software, which saw a total of $20.8 billion invested across more than 1,800 deals. That was by far the highest level of VC activity in the software sector since the first Dot Com Boom of 1999 to 2001. And if the 2014 trends hold up, VC activity will exceed those once gaudy numbers from a decade and a half ago.

While PWC didn’t break down the VC investments within the software sector, it’s clear that much of the money is going into big data and analytics, with cloud computing, security, and healthcare also being particularly hot segments within IT.

We do our best to track big data startups and VC activity here at Datanami. While 2015 hasn’t seen the number of huge moves that we saw in 2014–when we saw Cloudera bring in close to $1 billion in investments and Hortonworks, MapR Technologies, and DataStax each had $100-million rounds—it hasn’t exactly been quiet in the funding department either.

Here are some of the notable rounds of funding that big data software companies have completed so far in 2015:

January

Dato (formerly GraphLab) — Raised $18.5 million in Series B financing to continue building graph analytics software – see http://www.datanami.com/2015/01/08/dato-to-unleash-machine-learning/

Interana — Raised $20 million in Series B funding to continue R&D of its specialized time-series database – see http://www.datanami.com/2015/01/21/interana-nabs-20m-continue-work-time-series-analytics/

Treasure Data — Raised $15 million in a Series B round to build its cloud-based analytics service – see http://www.datanami.com/this-just-in/treasure-data-raises-15m-series-b-financing

 

February

Rapid Miner — Raised $15 million in Series B financing to fund development of its data mining tools – see http://www.datanami.com/this-just-in/rapidminer-nabs-15m-in-funding/

 

March

Tachyon Nexus — Raised $7.5 million in Series A financing to fund development of the Tachyon file system, an alternative to HDFS developed at the AMPLab – see http://www.datanami.com/2015/03/17/tachyon-nexus-gets-7-5m-to-productize-big-data-file-system/

Ayasdi — Raised $55 million in Series C financing to solidify its unique topological data analysis software – see http://www.datanami.com/2015/03/25/mapping-the-shape-of-complex-data-with-ayasdi/

Birst — Raised $65 million in late-stage financing to develop its business intelligence tool — see http://www.datanami.com/this-just-in/birst-announces-65m-investment-round/

Looker — Raised $30 million in a Series B round to continue R&D into its cloud-based BI platform – see http://www.datanami.com/this-just-in/looker-closes-30m-series-b-financing-led-by-meritech/

 

April

Rocana (formerly ScalingData) — Raised $15 million to develop its operational analytics software – see http://www.datanami.com/this-just-in/big-data-start-up-rocana-raises-15m/

Datatorrent — Closed a $15 million Series B round to help it develop and sell its real-time streaming analytics tool – see http://www.datanami.com/this-just-in/datatorrent-closes-15m-series-b-financing-round/

Pepperdata — Raised $15 million in Series B financing to continue development of its Hadoop resource management tool – see http://www.datanami.com/this-just-in/pepperdata-closes-more-than-15m-in-series-b-funding/

Niara — Closed a $20-million Series B financing round to develop its Hadoop-based cybersecurity tool – see http://www.datanami.com/this-just-in/niara-emerges-from-stealth/

MD Insider — Raised $9.5 million in Series A financing for its hosted big data platform for healthcare providers – see http://www.datanami.com/this-just-in/md-insider-announces-9-5m-in-series-a-funding/

 

May

DataHero — Raised $6.1 million in Series A financing for its cloud-based BI platform – see http://www.datanami.com/this-just-in/datahero-secures-6-1m-in-series-a-funding-to-simplify-data-analysis/

Feedzai — Closed a $17.5 million Series B round to help it build a cloud-based machine learning platform – see http://www.datanami.com/2015/05/19/cloud-bi-machine-learning-startups-attract-investors/

MarkLogic — Raised $102 million in a late-stage round to help it develop its NoSQL database — http://www.datanami.com/2015/05/12/nosql-battle-heats-up-as-marklogic-hauls-in-102m/

 

June

Arcadia Data — Raised $11.5 million in Series A financing for its native Hadoop visualization tool – see http://www.datanami.com/2015/06/09/arcadia-emerges-with-visual-analytics-running-directly-on-hadoop/

Enigma — Raised $28.2 million in a Series B round to help it continue development of its data discovery and analytics software – see http://www.datanami.com/this-just-in/enigma-raises-28-2m-in-series-b-funding/

Adaptive Insights — Raised $75 million in a Series G round to help it develop its cloud-based CPM service  — see http://www.datanami.com/2015/07/01/adaptive-insights-raises-75m/

JethroData — Closed a $8.1 million Series B round to help it develop its unique Hadoop indexing technology – see http://www.datanami.com/2015/06/09/jethrodata-indexes-its-way-to-8-1m-sql-payday/

Snowflake — Raised $45 million in Series C funding to continue developing its cloud-based data warehouse – see http://www.datanami.com/this-just-in/snowflake-announces-45m-in-funding/

Sumo Logic — Raised $80 million in mid-stage funding to help it develop its log analytics solution – see http://www.datanami.com/this-just-in/sumo-logic-secures-80-million-investment/

AtScale — Raised $7 million in Series A financing for an OLAP on Hadoop offering – see http://www.datanami.com/this-just-in/atscale-raises-7m-in-funding/

Tamr — Raised $25.2 million in an early-stage round to fund development of its big data curation and transformation software – see http://www.datanami.com/this-just-in/tamr-receives-25-2-million-in-financing/

Prevedére — Closed a $6.7 million Series A round to help it develop its predictive analytics application – see http://www.datanami.com/this-just-in/prevedere-raises-6-7-million-to-fuel-big-data-predictive-analytics-solution/

Saama — Raised $35 million in Series A funding to help it develop its fluid analytics engine — http://www.datanami.com/this-just-in/saama-secures-35m-in-series-a-funding/

Redis Labs — Raised $15 million in Series B financing for its NoSQL database – see http://www.datanami.com/this-just-in/redis-creator-salvatore-sanfilippo-joins-redis-labs/

 

July

Confluent — Raised $24 million in Series B funding to help it develop Apache Kafka and streaming analytic tools – see http://www.datanami.com/2015/07/08/the-real-time-future-of-data-according-to-jay-kreps/

Zeta Interactive – Raised $125 million to help it fund acquisitions of machine learning and predictive analytics companies — http://www.datanami.com/2015/07/15/zeta-to-fund-big-data-buying-spree-with-125m-round/

Clearly the big data space is ripe for investments  in the eyes of venture capitalists. Considering the impact that a properly engineered big data analytics strategy can have on a company, this is not at all surprising.

Related Items:

Big Data Getting Big Bucks from VC Firms

8 New Big Data Projects To Watch

How Machine Learning Is Eating the Software World

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