- Starburst raised $250 million from Alkeon Capital and nearly tripled its valuation to $3.35 billion.
- The big data startup is focused on going public within the next few years, its CEO told Insider.
- To compete against cloud data giant Snowflake, it’s betting that data is becoming more spread out.
Big data startup Starburst competes in the red-hot data space that’s currently dominated by $88.3 billion cloud data giant Snowflake.
But Starburst CEO and cofounder Justin Borgman thinks the startup can break through by building products around the idea that data is more likely to be decentralized and available across a company in the future. That model, commonly known as data mesh, is in contrast to the centralized data warehouse approach that has dominated for decades.
And that bet is paying off as it catches the attention of investors, vaulting Starburst toward a potential initial public offering in the next two or three years, Borgman tells Insider.
“Our ambitions are squarely on how to build a large, publicly traded business,” Borgman said.
In pursuit of going public, the startup announced on Wednesday a $250 million Series D led by Alkeon Capital, with participation from Altimeter, B Capital Group, and existing investors like Andreessen Horowitz, Coatue Ventures, and Salesforce Ventures. Starburst’s previous fundraise was a $100 million Series C last January, and this round brings its total funding to $414 million.
Starburst is now valued at $3.35 billion, nearly triple its $1.2 billion valuation from its previous round, according to the company.
With its newest cash infusion, Borgman says the five-year-old startup is investing in its product, namely its Galaxy service, which helps engineers to work with data in Amazon Web Services, Microsoft Azure, or Google Cloud. Starburst is also opening an office in the Asia-Pacific region, planning acquisitions to help build its vision of a data mesh, and aims to double its 350-person staff this year, according to Borgman.
The startup is also changing its customer base by targeting smaller companies. While it’s currently “very weighted toward really large enterprises,” a recent change from a subscription to usage-based pricing model lets customers use its products without an upfront contract, making it easier for smaller companies to get started, Borgman said.
Built on the open-source Presto big data engine, Starburst hopes it can see the same success as other data startups like $38 billion Databricks and $19 billion Confluent, which were also developed on top of open-source projects. They’ve thrived even going up against AWS and Microsoft, partly for that reason, and Borgman says he considers the companies role models.
While Starburst similarly competes against the data tools offered by cloud giants AWS and Microsoft, Snowflake is also a major competitor, according to Borgman. He says the two companies have “different world views,” and is counting on Starburst’s data mesh strategy to ultimately win out against Snowflake’s data warehouse approach.
“Snowflake is a great database,” Borgman said. “We just don’t think it is the single source of truth, and that’s the distinction over 40 years of data warehousing history.”