|Power Score: 71.32||Momentum Score: 82.35 (2)||HQ: Bozeman, MT||CEO: Frank Slootman|
Valuation: $70.46 billion (+468% vs. last round)
Amt. Raised: $1.4 billion
Lobbying Spend: No
Industry Orgs: No
Headcount: 3,336 (+56% YoY)
Engineering Headcount: 726 (+73% YoY)
Big Tech Experience: 12%
Open Roles: 552
R&D Spending: n/a
Patents Applied For: 7
Patents Owned: 157
Acquisitions: Polidea (March 2021); CryptoNumerics (August 2020)
Exec Team Exits: No
Diversity Data: No
ESG/CSR Data: No
Snowflake has grown at dizzying speed in recent years. The company completed a
blockbuster IPO in September 2020, raising $3.4 billion and garnering a valuation of $70.4 billion; less than a year prior, Snowflake raised funds at a $12.4 billion valuation. Headcount nearly doubled in the same time frame.
Snowflake's power is somewhat limited to the economic realm, though. It derives that economic power from strong customer relations and strategic partnerships. For instance, Snowflake boasts an exceptional net retention rate of 168% as of April 30, 2021, suggesting that customers are not only loyal but eager to pay more for Snowflake's services. It also picked up Salesforce as a critical strategic partner in its final private fundraising round; Salesforce's customers represent an attractive target audience for Snowflake, given the reams of often-untapped data stored in the Salesforce CRM.
The database industry is Snowflake's to lose, but the company does have some vulnerabilities. Critics have likened its closed software ecosystem to that of Oracle in its early days; they argue that a closed ecosystem locks customers in and stifles innovation, allowing a company to get by without innovating as much. The Oracle comparison is no coincidence, considering Snowflake's co-founders all gave up lengthy careers at Oracle to create Snowflake. The company hasn't shied away from addressing these claims, but the debate over open versus closed architectures is still in the early stages.
Snowflake hasn't cultivated soft power nor has it prioritized DEI transparency. The company got a wake-up call earlier this year when, in an interview for Bloomberg TV, its CEO called for a more "moderated" approach to diversity so that it didn't "override merit." Slootman later apologized for the "lack of clarity" in those comments. Despite the walk-back, the incident speaks to the blind spots that can arise when a company is so narrowly focused on economic growth. Whether Snowflake will do anything about it — especially as it enters a period of rapid hiring — remains to be seen.
They Said It
"A lot of these systems are heavily grafted into business processes. It's not easy to decouple these things and manage through that. So it's not a low-friction world, in terms of just saying, 'Oh, yeah, we're going to be on the cloud by October.' It's a serious undertaking." —CEO Frank Slootman in an April 2020 interview with Protocol (edited for brevity and clarity)