Software startup Cockroach Labs doubles valuation in latest funding

Spencer Kimball, CEO of Cockroach Labs

Source: Spencer Kimball | Wikipedia

Cockroach Labs has raised $278 million in a Series F funding round, valuing the enterprise software company at $5 billion — more than double its valuation from earlier this year. The company is headquartered in New York City, 27th place in this year CNBC Disruptor 50 has raised $633 million to date.

Its latest funding round is being led by Greenoaks Capital, and it includes new investors Index Ventures, Coatue, FirstMark and Redpoint, among others. Existing investors include Altimeter Capital, Tiger Global Management, Lone Pine Capital, Bill Gurley’s Benchmark Capital and GV, the venture capital arm of parent company Google Alphabet, also participated in the competition round.

In 2015, Cockroach Labs began rewriting the database using a native, open source environment in the cloud, helping companies create applications that could scale as needs changed. The company’s management system has helped businesses move their capabilities online faster during the pandemic. CockroachDB, the company’s proprietary, cloud-native database designed to help Cockroach Labs compete in a cloud world dominated by Microsoft Azure, Amazon Web Services (AWS), and software vendors large as Oracle and Sales force, as well as a crowded field of other database startups.

Cockroach Labs clients include eBay, CNBC parent company Comcastand the new Brazilian fintech miner to go public Nubank, among others.

“This latest round of funding reflects our customers’ rapid advances in production deployments, supporting the growth of the business as we lead the migration of transaction data to the cloud,” said Spencer Kimball , co-founder and CEO of Cockroach Labs told CNBC in an email. “It allows us to accelerate our investment in R&D and continue the innovation needed to realize our vision.”

All eyes on enterprise software

The company’s new funding is the latest in a hot private market of cash-strapped enterprise software companies.

Earlier this week, low-code software company Airtable raised new $735 million, which raised its value to $11 billion and became the fourth most valuable software startup after Grammarly, last month. raised $200 million at a $13 billion valuation. Databricks now worth 38 billion dollars after a funding round in August, and Canva topped a $40 billion valuation at the same time.

Correction has occurred in publicly traded software stocks that have not fallen to the top tier of venture-backed software companies, continuing to attract massive valuations after the bull market prices last more than 10 years.

Databricks – which one 37th place was on the CNBC Disruptor 50 list this year and raised $2.6 billion from investors this year – where is it putting its money, announced last week that the company is entering the business Venture capital with new Lakehouse venture fund, named after its proprietary open source project company named Data Lakehouse.

“We’re going to see more and more of this happen in the future,” Databricks CEO Ali Ghodsi said on CNBC’s.TechCheck“Last week, he added that every major software company will ‘restructure’ around superintelligence and will need to invest in AI startups.” There’s a lot of money pouring into startups in the data and AI ecosystem.” “Startup founders keep coming to us and knocking on our doors.”

In addition to the new valuation, Cockroach Labs says it tripled its annual recurring revenue last year and posted 500% growth in cloud revenue in the last quarter alone. However, stock market investors have reduced their exposure to cloud stocks in recent months. The WisdomTree . Cloud Computing Foundation is negative year-to-date after more than doubling in 2020.

In a 2022 software engineering outlook, JPMorgan analysts including Sterling Auty and Jackson Ader lower their ratings over 13 companies, while upgrading only five.

The reasons for the downgrade include a combination of limited upside to our price targets, pricing due to increased interest rate risk in 2022, rate adjustment, analysts wrote. discounting the current exchange rate environment and reassessing reasonable cash flow expectations”.

The threat of a rate hike in a high-inflation environment has been troubling technology investors over the past month.

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Sarah Ridley

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