Big Data Attracting Big Bucks from Investors


If you need a measure of just how important the Big Data economy is becoming, take a look at what’s happening in Silicon Valley — specifically, how much money is flowing into software and Internet companies right now.

It’s a lot. During the first three months of 2014, venture capitalists invested $9.5 billion in 951 U.S. companies, according to a summary of the most recent MoneyTree report (Q1 2014; subscribers only), put out by PricewaterhouseCoopers, the National Venture Capital Assn. and Thomson Reuters. Of that, nearly half ($4.0 billion) went to software companies – an increase of 39% from the prior quarter.

Venture capital is “rising to levels not seen since 2001,” says this LA Times article.  It’s the latest sign of the growing optimism that’s creating a new boom in the region. Analytics company Palantir netted a tidy $102 million in investment dollars last quarter. But the big winner was Cloudera, which received $160 million from T. Rowe Price and others, and another $740 million from Intel in a deal announced last month. The Palo Alto-based company is building out its enterprise analytic data management using Apache Hadoop, a key technology for culling unstructured data that makes Big Data possible.

“The market opportunity for companies to gain insight and build transaformative applications based on Hadoop is tremendous,” said Cloudera CEO Tom Reilly in the Cloudera press release. “We believe Cloudera will be the company to lead this global shift in extracting value from data.” And since Tomis an unbelievably sharp cat, with a phenomenal track record, I have every confidence he will.

For investors, $900 million is a big vote of confidence. This investment round for Cloudera was the second-largest deal ever made, according to the Wall Street Journal ranking only behind Facebook’s $1.5 billion round a few years ago.

Big Data companies were already riding a swelling tide of cash. Last year saw Big Data startups pull down $3.6 billion in venture financing – a huge jump from the previous four years.

The Big Data opportunity is drawing in high-profile investors in Silicon Valley, as well as new faces. Three years ago, a group of venture capitalists started the Data Collective, a San Francisco firm focused on Big Data investments. The firm just recently announced it had raised $125 million for a new fund to invest in data companies.

It’s all an indication that Silicon Valley investors sees now as a critical time to go big into analytics and Big Data technologies, to meet the challenge of extracting value from data and to unlock new business growth. With the volumes of data being collected, the competition to analyze it and extract value is quickly becoming a race to deliver the most powerful solution.

Image credit: Patrick Hoesly

Related article: Palantir, Privacy and Controlling the Power of Big Data

Posted in Big Data by Lisa Petrucci

Lisa Petrucci is Vice President of Dun & Bradstreet Global Alliances and Partnerships.

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