Snowflake stock climbs to the largest software IPO ever; Madron among former venture investors

S. of Madron Venture Group. Somasegar and former CEO of Snowflake Bob Muglia previously worked together as Microsoft executives. (Madron venture group photo)

Snowflake made a bang in its public debut, raising $ 3.4 billion in the largest software IPO ever.

The data warehousing company opened at $ 120 / share after pricing its IPO at $ 245 / share. Its stock climbed in Wednesday trading, closing at $ 253.93, and valued the company at more than $ 60 billion.

The IPO is a windfall for the company’s investors, including the Madron Venture Group. Madronen Managing Director.S. Soma said the Seattle-based firm invested in 2017 when the company was valued at about $ 500 million.

Somsager said, “Sometimes you get a team and a technique that prepares to take off.”

Madron is not listed in Snowflake’s IPO documents, as the company owns less than 5%, and did not disclose the value of its stake.

Snowflake investment was a bit unusual for Madron, which typically invests in early-stage startups based in the Pacific Northwest. But the firm has expanded its geographic reach in recent years and launched a $ 100 million “acceleration fund” for later-stage companies in 2019.

In 2017 Madronen invested in a Series E round for healthcare startup Acolade, which opened a second headquarters location in Seattle in 2015. Acolade went public earlier this year.

Other Madrona portfolio companies to go public in the last five years include SmartSheet, Apptio, Redfin, and Impinj – companies that received funding from Madrona in its early days.

Madonna’s investment in Snowflake represented the reunion of then-Snowflake CEO Bob Muglia and Somasegar, who worked with Muglia at Microsoft for many years. Somsegar headed Microsoft’s developer division, while Muglia was president of the company’s server and tools business.

Mughalia owns 4 million shares of Snowflake, or more than 1.7% of the company, after Warren Buffett’s deal to sell half of its stake to Berkshire Hathaway as part of the IPL. The remaining share of Mughalia was valued at more than $ 1 billion of today’s business. (Note: Mughalia’s stake and valuation went right since publication to reflect the Berkshire deal.)

Snowflake, founded in 2012, also opened a new engineering office in Bellevue, Wash., A few months before Madrovan’s investment.

“It was great to work with Bob and the team and build their Seattle presence and help them become a true multi-cloud solution,” Somasegar said.

In July, Madonna led a $ 27 million round at Fona, a company founded by two former Twitter engineers, leading themselves as a leader in databases for a new generation of applications. Mughalia is the executive chairman of Fauna.

Snowflake’s data warehouse is a special type of cloud database designed for analytical applications. The company has more than 3,100 customers including Brex, ConAgra Foods, Domino’s, JetBlue, and N Nationwide. It has more than 20 offices worldwide, including the Seattle-area Hub, and was one of the most valuable private tech startups in the world prior to the IPO.

Frank Slotman, CEO of Snowflake. (Snowflake photo)

Company of San Mateo, California. A company with revenues of more than $ 242 million in the first half in 2020, a net loss of $ 171.3 million, down from $ 177 million in 2019.

Mughalia previously led Snowflake as CEO for five years, but stepped down in May 2019. Frank Slotman, who served as president and CEO of the service from 2011 to 2017, now heads the company.

Dragoneer Investment Group – a back of AirBnB, Slack, Spotify, Uber and other giants – led a $ 479 million Series G round in February that included Salesforce Ventures. Snowflake was worth $ 12.4 billion at that time. Other backers include Altimeter; ICONIQ Capital; Redpoint Ventures; And Sequoia.

In its IPO filing, Snowflake listed Amazon Web Services, Microsoft Azure and Google Cloud Platform as potential risk factors for the business. All three competitors provide their own data warehousing service.

Snowflake said most of its business runs on AWS. CNBC reported on Wednesday that the company has “long-term exposure to IPO investors” with Amazon due to part of Amazon’s competitive Redshift product.

Snowflake is one of several tech companies filing for an IPO this year, as many have been trading since debuting on the public markets, despite the ongoing epidemic and economic crisis. Others, including DoorDash, AirBnB and others, are expected to go public soon. As New York Times reported, “It’s time for a bonanza in Silicon Valley and Wall Street.”

Here’s another comment on the IPO from Wednesday: