Snowflake IPO: Data Warehousing Company Confidentially Files
In 2019, it was announced that a Snowflake IPO would come to the market. And recently the company confidentially filed with the SEC. Now investors want to know when to expect Snowflake stock.
But is Snowflake a good investment? Here’s what we know…
Snowflake IPO: The Business
Three data warehousing experts founded Snowflake in 2012, naming it for their love of snow sports. The company’s first CEO was venture capitalist Mike Speiser. He remained at the company while it was in stealth mode. It wasn’t until October 2014 that Snowflake launched to the general public under its new CEO, Bob Muglia. Muglia brought experience from his time with Microsoft, where he held several executive positions.
Snowflake is a data-warehousing company. It offers cloud-based data storage and analytics services. These allow corporate users to store and analyze data using cloud-based hardware and software. Snowflake’s services currently run on Amazon S3, Microsoft Azure and Google Cloud Platform. The company’s Snowflake Data Exchange lets customers discover, exchange and securely share data.
In 2019, former ServiceNow CEO Frank Slootman became Snowflake’s new CEO. And in October 2019, he said there might be a Snowflake IPO in the summer of 2020. The company recently reached a valuation of $12.4 billion. And it looks to be worth even more.
Snowflake Funding Gives Lofty Valuation
Snowflake ended its Series G funding in February. The round closed with $479 million raised. With that amount, Snowflake has raised $1.4 billion since its founding and reached a valuation of $12.4 billion.
This isn’t unusual for tech startups. But Slootman thinks the Snowflake IPO will further increase the company’s value. At the time of the company’s last funding round, he claimed revenue had grown 174% from last year and would soon hit $1 billion. He stated:
The reason is that our growth trajectory is so fierce and our addressable market is so large. When companies grow so fast, as Snowflake has, the valuation may seem like a big number now but not later. When I was with ServiceNow, the valuation was $2.5 billion when we went out and now it has a $65 billion valuation.
Analysts estimate that the launch of Snowflake stock could bring the company’s value to $20 billion. And the timing couldn’t be better for this tech startup.
Snowflake Stock: Coronavirus Creates Demand for Cloud Services
Since social distancing orders in March 2020, more employees are working from home. As a result, companies need better platforms to store data and information online. This allows employees to be more productive from home.
So demand for cloud services has increased. And this led to the successful IPO of Kingsoft, a cloud service provider in China. It’s also why the Snowflake IPO is likely to be successful. Cloud providers let companies store data online rather than at a physical location. This lets employees access data from almost anywhere.
I’ve been getting emails from CTOs all over the place saying that COVID-19 is accelerating their interest. It’s become a catalyst for driving investments in data platforms. The reason is, they’re trying to figure out what the hell is happening to them. There’s an old soccer player in Europe who used to say, ‘Every disadvantage has its advantage.’ And that’s sort of what’s happening here. We’ve become a beneficiary of really bad things happening in the world because they need our platform to help understand it.
Although countries are starting to reopen, it’s likely that social distancing practices will continue until there is a coronavirus vaccine. This could give companies like Snowflake a long-term advantage.
And if you’re interested in investing in Snowflake stock, you want to know…
When Will Snowflake IPO?
Snowflake confidentially filed with the SEC. That means the company’s filing doesn’t need to be public until 15 days before its roadshows. By doing this, Snowflake is less likely to be affected by market fluctuations and investor criticism until the company is ready to launch on the market.
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Some analysts think the Snowflake IPO will come as early as Q3 of this year. And as the markets show signs of recovery from the coronavirus crash, the timing couldn’t be better for Snowflake stock.