❄️SNOW in California
Happy holidays! Plus: Antitrust hits Big Tech, new seed funds, more IPOs, possible IPO bubble and boom in online commerce.
Wrapped Up Newsletter #5
Today’s Menu
Deep Dive: What is Snowflake?
Quick Bits: Big News for Big Tech
What Else We're Following: 10 articles about everything from Midas to building a billion dollar company
Jobs - Internships/Full-Time: 15 full-time jobs and internship postings
Feedback: help us to deliver the right content straight into your inbox
Deep Dive 🤿
Nothing screams Christmas or Hanukkah in 2020 than a festive end-of-the-year nor'easter hitting the U.S. Stay safe, my fellow East Coast humans.
Speaking of Christmas, there's no better way to kick off Michael Bublé's favorite holiday with some eggnog and stonks. Since IPOs have been popping off in recent months, it's only fitting to talk about one that has seen a chilly jump in valuation: Snowflake.
You can't spell enterprise without rise.
Snowflake, a cloud-based data storage software company, made its debut as the largest software IPO in history. The enterprise data analytics company initially priced its IPO at $120 and it's now trading...well, 2.75x above that. Earlier this month, Snowflake announced its first earnings report as a public company, and the results were mixed. Sales were up 119% YoY in Q3 but the company expects revenue to only grow 88% next quarter, less than the 102% projected by analysts. A hockey stick growth can only sustain itself for so long; if Snowflake is right in its estimates, it would be the first quarter in which the giant hasn't doubled revenue on a yearly basis.
And not all people are on board with the company's sky-high valuations. The volatility surrounding its stock has put investors on edge. While optimists including Warren Buffett are betting on the company to be a leading player in the data warehousing space, pessimists have stated that a reckoning is bound to come. On Wednesday, the pressure to sell only heightened amid a lockup expiration date. Lockup restrictions on early shareholders selling have begun to expire, thus allowing early investors and employees to offload shares onto the market. The fluctuation in volume being traded was reflected in this week's stock performance, with Snowflake's shares trading from $390 (8 Dec) down to $325 (16 Dec). Remaining lockup restrictions will expire early next year, putting the company within reach for another sell-off.
Amid the sell-off, while many of you may be searching for the next "golden" opportunity to buy, it's important to first ask yourself, "Snowflake...what really is it?"
After chatting with a close friend of mine who was an early software engineer at Snowflake, he was able to give us a brief breakdown of his experiences (and tell us what the company actually does in layman's terms).
People hear buzzwords like "cloud computing" and "data warehousing" and easily jump into the hype of investing into these newly-IPO'd tech companies without understanding what they truly do. For the average, non-technical individual, could you explain what Snowflake does?
Snowflake is a relational database that was built specifically for the cloud. It enables businesses to make data-driven decisions far more easily. Of course, people did this before, but it was previously a time-intensive process for businesses that aren't on Snowflake and can require a lot of time on their side. We enable businesses to do this way more quickly, and because they can do this more quickly, they can start doing more analysis that they weren't doing before.
Snowflake came out of stealth in 2014 and you were considered to be one of the earlier employees at the firm. Since its IPO, the company has been valued more than Uber, Airbnb, DoorDash, and Palantir (that's a serious flex). How has your role changed over the years as the company expanded into the software behemoth it is today?
I got involved with Snowflake in 2017; I wasn’t the earliest employee by any means but it still felt like a startup when I joined. I've gotten to see the company change so much. Personally, the primary change has just been getting more responsibility: having to make more decisions, do more technical design work, drive projects forward, etc. We’ve always had a lot of ideas we wanted to work on in my group but we didn’t always have the bandwidth. Now that we’ve grown and we have more people, we have the capacity to do that.
Amid the acceleration of tech adoption caused by COVID-19, what lasting trends do you foresee in the world of "cloud computing" and "data warehousing"?
Many companies had plans to move to the cloud but there was never a pressing need. COVID-19 really accelerated that timeline because people needed to figure out how to set up new revenue streams – using data to answer those questions was useful. And it was hard to manage on-premise systems due to the pandemic. I think the future is bright for this area; more companies are realizing they may have to be more agile to adjust to changes in the ways their business operate and making data-driven decisions is a big part of that. I'm hoping Snowflake plays an important role in this capacity.
What are some major takeaways and key lessons learned from working for a scrappy startup to being a major tech player in the software space?
To succeed, we had to be dynamic and able to adjust quickly to new information/problems. If we had an issue or an outage, we’d need to jump on that immediately and, sometimes, do a lot of work to prevent it from happening again. And that was always on top of our other projects too, so the workload could be a handful, especially when we didn’t have that many people at Snowflake.
Quick Bits 🌎
Recap in the West: Big News for Big Tech, Western Edition
Big Tech vs. Big Tech. EU won't break from breaking up Big Tech. Microsoft got hacked and Google was unavailable. Oh, and Google's getting sued for ads. Add Zenoti, ClickUp and BigID to the three commas club. Reddit plays offense on TikTok. A backpack that makes you stronger. EA races in and crashes Codemasters' party. 20VC's Harry Stebbings complies with Taxdoo. Nothing screams royalty than oat-milk lattes and an exclusive multi-year Spotify deal. Your favorite cryptocurrency exchange, dating app, and online resale marketplace files for IPO. GoCardless becomes a soonicorn. Lydia wants to become Europe's Venmo (and more). StockX is in the runnin' for an IPO. So is health insurer Oscar too. Amazon now makes the perfect t-shirt. Bolt wants to be like (and be different than) Uber. Europe green-lights Google-Fitbit deal. Brainly wants you to do homework better. Gamers hit the disco with Discord's new valuation. Move aside Robinhood, Public gets social with stock trading. New seed fund New Wave debuts. Cargo.One wants to distribute your COVID-19 vaccine. Latitude goes long on Series B.
Recap in the East: Big News for Big Tech, Eastern Edition
China lays down the law on Big Tech and promises non-immunity. Indonesia's #2 startup Tokopedia is the latest to get SPAC'd. Tencent bumps to Universal Music Group's tune. Hurdles ahead for Grab and Gojek. Razer Fintech relies on Rely for its 'buy now, pay later' feature. Vickers Venture's SPAC raises for an IPO. Zomato sets eyes on IPO after new fundraising. Alibaba gets FOMO. Out of Luckin' Coffee. Home chefs make a dime in sharing economy. Peer-to-peer lending Funding Societies finds a peer. Cell-based foods are becoming mainstream, now with milk. Baidu goes offline with EV. JD.com seeks for the next Pinduoduo. Alphabet's life sciences arm gets investment injection from Temasek. Australian VC Square Peg got SEA pegged. Flipkart amps up stake in PhonePe. Ayala Group gets ACTIVE in VC in the Philippines.
What Else We're Following 👀
The Midas List Europe 2020 is out
Say bye to the '9-to-5' and hi to the '3-2-2' workweek
The fascinating history and makeover of China's Silicon Valley, Zhongguancun
How to become the fastest-growing software unicorn in history, told by Hopin's Johnny Boufarhat
From sleeping on the streets to running a unicorn: an inspiring rags-to-riches story of Taihei Kobayashi
Advice from a typical day in the life of Shopify founder and CEO Tobi Lütke
Justin Fishner-Wolfson, investor @ Airbnb, Palantir & Wish, DGAF about first-day pops
What to expect on consumer trends of 2021, recommended by Fred Wilson
NYC startup legend Kevin Ryan's fundraising recipe to success
Paul Graham on being earnest in the world of VC
Tweet of the Week 🐦
🔌 If you're interested in VC, give Nafisa a follow on Twitter! A current senior @ Rice University, a VC fanatic and a good friend of mine, she has some interesting (and fun) threads worth checking out!
Jobs - Internships/Full-Time 👩🏽💼
We're keeping an eye out for relevant and exciting opportunities for you! If you represent a company and want us to promote an open position, send us an email!
Entry Level (0-2 Years)
Merantix AG - Venture Architect Intern - Berlin
TrueGrowth - VC Internship - Berlin
signals - Intern, Pre-Seed Investments - Berlin
Contrarian Ventures - VC Intern - Vilnius/Remote
Force over Mass - VC Intern - London
Amplified Capital - Venture Analyst - Hong Kong
Plug-and-Play - Venture Analyst - South Korea
West Venture Studio - Growth Intern - San Francisco
Experienced (2+ Years)
Plug-and-Play - Venture Associate - South Korea
ProjectTogether - Strategic Venture Lead - Berlin
Freeletics - Head of Venture - Munich
Forto - Chief of Staff Product Management - Munich
Lydia - CFO - Paris
Upvest - Chief of Staff - Remote
Legacy Venture - Investment Analyst - Palo Alto
Feedback
Hey there! We are Jeff, Dom and Vas, coming to you live from INSEAD. Thanks for reading Wrapped Up. We'd love to get your feedback - feel free to email us at jeffrey.dong@insead.edu! It will help us to improve the newsletter and deliver the content you want right into your inbox. Thanks!
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