$12.4 billion Snowflake thinks its new data exchange that's already working with FactSet and Coatue will be the buzzy startup's next 'massive accelerator'
- Buzzy startup Snowflake, which was last valued at $12.4 billion, is building out an exchange to serve as the go-between for consumers and data providers.
- The startup, which built a business helping firms manage data, also sees itself as well-positioned to serve as a data marketplace, Matt Glickman, Snowflake's VP of customer and products strategy, told Business Insider.
- Glickman said the exchange serves as a way to draw in new customers and allows Snowflake to interact with employees who are directly involved in investment decisions.
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A new product from one of the hottest tech startups in the world is aimed at addressing a major need for Wall Street, and its executives believe it will lead to big business for a company that has already proved wildly successful.
Snowflake, the cloud data platform last valued at $12.4 billion, is in the early stages of building out a data exchange where providers can connect with the consumers of their data in a marketplace hosted and managed by the startup.
Announced last summer at the company's annual conference, the Snowflake Data Exchange has already nabbed hedge fund Coatue, data giant FactSet, and $53 billion asset manager Causeway Capital Management as early adopters of the new marketplace.
The startup's new offering is run by Matt Glickman, VP of customer and products strategy at Snowflake, who spent more than two decades at Goldman Sachs. Glickman told Business Insider the new business has big potential for a company that has already managed to raise over $1.4 billion in funding from likes of Sequoia Capital, Dragoneer Investment Group, and ICONIQ Capital.
"I think it's going to be a massive accelerator," said Glickman of the Snowflake Data Exchange's impact on the company's overall business.
"To be able to pull data from the outside world was one of those kind of unspoken pains that I think plagues every industry, as I found, but particularly plagues the financial services industry, which is so much about getting data in a timely fashion constantly from the outside."
Snowflake sees big opportunity in running a data marketplace
Snowflake, which raised $479 million in a funding round led by Dragoneer and Salesforce Ventures in February, built its core business around helping companies manage data across various cloud environments.
As Wall Street has grown more comfortable with using the public cloud, firms have begun to establish strategies around choosing providers. Snowflake helps enable firms to remain cloud-agnostic. In May 2019, Business Insider reported JPMorgan was working with the startup.
Now, the company is looking to leverage its customer base of more than 3,500 clients and serve as the go-between for all their data needs.
To be sure, Snowflake isn't the only player looking to launch a data exchange. The concept has been en vogue in recent years as all firms, not just those in financial services, rely more heavily on a variety of data feeds.
However, Wall Street, with its thousands of traditional and alternative data feeds, stands as a shining example of a space that needs help managing the flow of information.
Crux Informatics launched with the intention of meeting those very needs. The startup, created in 2017, has raised $41 million from Goldman Sachs, Two Sigma and Citi. In February, Business Insider reported on a series of executive departures and the closing of its San Francisco office.
Glickman said Snowflake's core business has put it in position to serve as the data marketplace for the industry, as connecting to multiple parties was something "that fell out of the architecture."
"You need critical mass of participants who are going to be there anyway," he added. "I can list all I want, but if I don't have a corpus of customers who want to connect or already have their data on this platform, then you're not going to get that ignition phase."
The exchange has helped the startup establish new relationships
The knock-on effects of the Snowflake Data Exchange are already being felt by the larger business, Glickman said.
For one, consumers of data are pulling their vendors, some of whom had no interaction with the startup, onto the platform for the first time.
Glickman said the exchange is serving as an introduction to data providers who hadn't previously worked with the startup. As more consumers of data are looking to ingest data via the exchange, they're pushing their own providers to list on Snowflake as well, which is helping to grow the market, he added.
The benefits go beyond just getting new customers on board. Glickman said the data exchange is also allowing the startup to interact with a different part of customers' businesses.
Traditionally, Snowflake interacted with the tech teams tasked with building out the infrastructures its clients were built on. However, the data exchange has created a new entry point for the startup to talk with actual consumers of data who are making investment decisions for their firms.
"This is no longer an infrastructure-only discussion," Glickman said. "This is elevating the discussion to have, 'What business problems can we solve together?'"