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March 31, 2014 11:52 pm
A Silicon Valley “big data” start-up has raised $900m in a private share sale, marking the biggest fundraising by a US tech company since Twitter’s IPO last November.
The financing for Cloudera highlights the race involving investors and leading IT companies to build a new generation of technology platforms capable of managing the mass of data thrown off by social networks and connected “smart” devices.
The fundraising values the six-year-old company at $4.1bn, adding to the recent escalation in valuations that has created a new group of multibillion-dollar tech start-ups.
Much of the money came from Intel, giving the chipmaker an 18 per cent stake in Cloudera. Intel had previously developed its own version of the data management technology known as Hadoop that Cloudera uses, but said it had folded its development effort into the start-up as part of the deal.
The money for Cloudera – along with a $100m investment last week in rival Hortonworks – highlights the widening investor interest in Hadoop. Developed by Yahoo to handle huge volumes of information collected online, Hadoop was released as an open-source project and has since attracted wide interest from IT managers.
The technology’s suitability for storing and managing vast amounts of information makes it ideal for the big data wave that has hit many companies, said Mike Gualtieri, a principal analyst at Forrester Research. However, he added that the open-source nature of Hadoop meant that it would be hard for any tech company to charge a premium for the software.
A third start-up, MapR, is also racing to stake out part of the Hadoop market, while IBM and Pivotal, a company partly owned by EMC and General Electric, have launched their own versions of the technology.
Mr Gualtieri predicted that Hadoop would be a highly disruptive technology for other technology companies that handle corporate data, suggesting that the likes of Oracle, SAP and Microsoft will eventually have to join the market.
Cloudera and Intel did not detail how much of the $900m came from the chipmaker. However, Cloudera had already announced a $160m round of funding from other investors led by T Rowe Price. Intel was the only investor named as the total was raised to $900m.
Tom Reilly, Cloudera’s chief executive, said the company would use the money to expand overseas and extend its relationships with other technology companies as it looks to boost its sales.
Intel has forecast that Hadoop will become the biggest application to run on servers based on its chips, which account for most of the machines running in the world’s data centres. A single sale of a Hadoop “cluster” to a big customer could account for several hundred machines, Mr Gualtieri said.
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