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November 17, 2020

DataRobot Eyes IPO After Another VC Haul

George Leopold

iQoncept/Shutterstock

As it sets its sights on the latest big data stock offering, enterprise AI specialist DataRobot has added to its war chest with a whopping $270 million “pre-IPO” funding round.

The venture funding magnet said Tuesday (Nov. 17) its investors currently value the company at north of $2.7 billion, or more than double its Series E valuation in September 2019.

The latest round was led by Altimeter Capital. New investors included T. Rowe Price, Tiger Global, Silver Lake Waterman, B Capital Group, Glynn Capital, ClearBridge, New Enterprise Associates and Sapphire Ventures as well as fund manager BlackRock.

The confluence of big data, cloud computing and business intelligence requirements have created an “inflection point, and DataRobot is at the front of the pack in terms of democratizing AI-driven business intelligence,” Brad Gerstner, founder and CEO of Altimeter Capital, said in announcing the latest funding round.

Investor enthusiasm in enterprise AI vendors continues to build, likely prompting another round of technology IPOs as AI-based platforms enter the mainstream. Earlier this week, for example, predictive analytics specialist C3.ai announced plans for an initial public offering on the New York Stock Exchange.

AI specialists and their backers—Altimeter Capital was a key investor in Snowflake—have been encouraged by soaring market valuations and the success of earlier IPOs. Those include September IPOs by cloud data warehouse specialist Snowflake (NYSE: SNOW) and data miner Palantir (NYSE: PLTR). The Snowflake IPO was judged the largest ever software stock offering.

Boston-based DataRobot claims one third of the Fortune 50 companies among its customers, reflecting “overwhelming demand for our platform,” said Dan Wright, the company’s president and chief operating officer. Its cloud platform currently supports more than 2 billion machine learning models.

The platform helps customers prepare data used to create and validate machine learning models, then deploy time-series and other models on the same AI platform. Data preparation tools are based on DataRobot’s acquisition last December of Paxata. The self-service data preparation tool runs on Apache Spark and is optimized for Hadoop.

Datarobot has applied its more than $700 million in venture funding for a series of earlier acquisitions, including: ParallelM, an automated machine learning services specialist; Cursor, a collaborative analytics vendor; Nexosis, a provider of machine learning APIs for developers; and Neutonian, developer of an AI-based modeling tool for analyzing structured data used in model building.

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