While Boardroom Insiders has long been known for our coverage of Fortune 500 executives, we also deliver plenty of insight on non-Fortune 500 companies.
Often, this includes so-called pre-IPO “unicorns.” Well-funded and investing big in technology, sales and marketing, their goal is to achieve rapid scale and quickly capture a large chunk of the market in which they operate. Our customers — many of them technology vendors and professional services companies —want to help these companies get there and look to us to keep them up to date on how they are spending their war chests.
Once the IPO occurs, we continue to deliver insight into these companies, including how their executives’ priorities are evolving.
For example, let’s take Snowflake Computing, whose recent public offering blew past the expectations of even the most bullish investors and analysts, achieving a mind-boggling valuation of $67.94 billion at opening.
Snowflake was founded in 2012 to help companies manage data they store on the cloud — the remote servers and software services provided by the likes of Amazon and Microsoft that firms use to store and process vast amounts of information. Snowflake had been considering going public for several years. To reach the finish line, it brought on Frank Slootman as CEO in April 2019. Slootman has decades of experience in enterprise software, most notably as CEO of ServiceNow, which he took public in 2012. After his appointment, he brought on a handful of executives from his inner circle at ServiceNow, including CFO Mike Scarpelli, CHRO Shelly Begun and Chief Legal Officer Rob Specker. With these appointments in place, Slootman was set to do something similar to what he did at ServiceNow, where he took the organization from around $100 million in revenue, through an IPO, to $1.4 billion.
Slootman and his assembled executive team succeeded in the offering. The Snowflake IPO raised close to $3.4 billion, the biggest tech offering in history. Investors are clearly eager to chase a business that has grown 174% year-over-year, according to the company’s IPO prospectus. The company said it had 3,117 customers as of midyear — more than double the figure 12 months earlier — and counts more than 150 Fortune 500 companies as customers. So, while the company has a strong foothold in the enterprise, there is still plenty of room to grow its enterprise sales. Snowflake predicted in its prospectus that the addressable market for its cloud data platform is around $81 billion.
What interests our customers most, however, is how the company plans to spend this capital windfall. According to Snowflake’s IPO prospectus (which we read so you don’t have to), “Our strategy is to advance the data cloud through the adoption of our platform. We intend to continue making significant investments both domestically and internationally in sales and marketing, research and development, and our partner ecosystem to drive our growth.” Slootman told Yahoo Finance in September 2020 that investors should expect Snowflake to remain aggressive in investing in the business. “High-growth companies like ours have to invest at a tremendous rate. It’s a very dynamic set up. We have to invest for years and years to come,” he explained.
Snowflake’s IPO prospectus is ripe with details for vendors, particularly those offering solutions and services that support enterprise sales and marketing. In the document, Snowflake describes its go-to-market strategy, which “is focused on acquiring new customers and driving continued use of our platform for existing customers. We primarily focus our selling efforts on large organizations and sell our platform through a direct sales force, which targets technical and business leaders who are adopting a cloud strategy and leveraging data to improve their business performance. Our sales organization is comprised of sales development, inside sales, and field sales personnel and is segmented by the size of prospective customers. Once our platform has been adopted, we focus on increasing the migration of additional customer workloads to our platform to drive increased consumption, as evidenced by our net revenue retention rate, which exceeded 150% as of Jan. 31, 2019.”
Partnerships are also a critical part of its strategy. Snowflake has developed partnerships with major cloud computing giants Microsoft Azure, Amazon Web Services and Google Cloud. Being available on all three platforms likely provides a boon in new customers and deals and will be critical to the company’s continued growth.
In June 2020, the company launched the Snowflake Partner Network (SPN), an ecosystem of technology and services partners for customers to leverage in their adoption of Snowflake’s single, integrated platform. The company says partners are critical to its growth, and the new program offers tiered partner incentives. Snowflake started with a referral program for partners. It also introduced resale and MSP programs for services partners and a Snowflake Ready Technology Program for technology partners to expand their partner offering.
We anticipate that Snowflake and other unicorns will remain important targets for many of our customers. Our team of analysts will track Snowflake’s strategic priorities as the company continues on its growth journey. Reminder: All of this information is available in our Executive Profile database, with more to come when the company reports its first fiscal quarter as a public company in late October.