Confluent Files to Go Public. Who Could Be Next?
Confluent, the company behind the open source Apache Kafka project, has filed to go public, the company announced this week. Confluent’s IPO has been expected for some time, but there are a number of other big data companies on the cusp of going public, too.
Not much is known about Confluent’s S1 filing with the Securities and Exchange Commission (SEC), as the company filed what’s known as a confidential draft registration statement, which basically means that it’s not a public document.
Confluent’s filing to go public has been expected for some time. Last June, the Palo Alto, California, company hired a new CFO named Steffan Tomlinson who was expected to help guide the company through the IPO process. When Tomlinson was hired, Confluent CEO Jay Kreps, who co-created Kafka with fellow LinkedIn engineers Neha Narkhede and Jun Rao, touted the sterling IPO track record of his new CFO. (Kreps was a Datanami Person to Watch for 2016 and Narkhede was a Datanami Person to Watch for 2017.)
Confluent raised $250 million in a Series E round a year ago, bringing the company’s total funding to $456 million. At that time, the company said it was valued at $4.5 billion. The company has positioned its Confluent Cloud as a enterprise offering for organizations that want to get value out of a Kafka-based real-time streaming data system, while at the same time continuing to make big engineering investments in the core Kafka software.
But Confluent isn’t likely to be the only big data IPO for 2021. In fact, it’s shaping up to be a potential banner year for tech IPOs in general. With stock market indices at or near record highs, tech firms are eager to test the public funding waters–and venture capitalists are similarly interested in recouping their early investments with blockbuster IPOs, a la Snowflake’s much-ballyhooed public debut last September, which was touted as “the largest software IPO ever” (even though Snowflake is actually a services company).
Here are other possible big data IPOs to keep an eye out in the months to come:
A Databricks IPO has been rumored for years, but with Snowflake’s massively successful public offering and Confluent now committing to being a public company, the odds look good that 2021 will finally be the year that the public can buy a piece of the company behind Apache Spark.
Databricks has emerged as one of the top cloud data warehouses, alongside Snowflake and the Big Three public clouds, Amazon Web Services, Microsoft Azure, and Google Cloud. Databricks has the advantage of being independent of the public clouds, and Databricks customers can use the company’s offerings to manage, analyze, and build AI using the big data they have stored in data lakes on the public clouds.
The company’s leadership, including CEO Ali Ghodsi (a 2019 Datanami Person to Watch), has talked about going public in the past, but with $1.9 billion in private capital raised so far (not to mention its prescient decision not to invest in pricey San Francisco real estate before COVID-19 hit in early 2020), Databricks has been in no rush to go public.
Nevertheless, the prestige associated with being a public company, not to mention the professionalism that being public signals to potential customers, may be too great to resist for Databricks, which is likely the next big tech firm to IPO–potentially in the next couple of months, if an October report by Bloomberg is correct.
DataRobot has also garnered a lot of attention as a potentially hot big data IPO.
The company, which develops tools to help data scientists build and maintain machine learning models, raised $270 million in a Series E round of funding last November. The following month, it padded the Series E with another $50 million from Salesforce Ventures, Snowflake, and Hewlett Packard Enterprise in what DataRobot itself called a “pre-IPO” round that valued the company at $2.8 billion.
But the timing of DataRobot’s IPO has apparently been a source of internal strife for the Boston, Massachusetts company. Jeremy Achin, the company’s CEO and co-founder (and a 2021 Datanami Person to Watch), stepped down from his leadership role in March; COO and president Dan Wright took his place in the CEO’s chair.
Achin left the company because of constant questions over DataRobot’s IPO and the timing of the event, according to a Wednesday story in the Information. According to the article, Achin would decide when the company went public, not investors
The odds would seem good that ThoughtSpot will eventually go public.
The Sunnyvale, California company, which develops business intelligence and analytics software, has raised more than $560 million in funding, including a $248 million Series E in 2019 that valued the company at just under $2 billion.
In a 2019 interview with Datanami, co-founder and executive Ajeet Singh wasn’t shy about sharing his plans to completely upend the BI and analytics market. ThoughtSpot would do that, Singh said, by developing analytics tools that are much easier to use than the current standard-bearers in the category, specifically Tableau, which is now part of Salesforce.
“It’s our goal to build a large independent company,” Singh said. “An IPO obviously is a very critical milestone along the way.”
The company was reportedly on a path to IPO in 2020. Then COVID-19 hit, growth slowed, and the plans were put on ice for a while. According to a September Forbes article, the company will try again this fall.