New York-based enterprise database startup Cockroach Labs announced Tuesday it closed on an $86.6 million Series D funding round. The company says it will use this capital to further develop its product and grow its headcount, being mindful of these economically uncertain times.
Database technology was invented about 40 years ago and has since gone through several evolutions. In the early days before the web, it was dominated by companies like Oracle. Then, the second wave of tech was built to support the earliest web applications — think Yahoo and Google.
“As the requirements for data have expanded, we’ve slowly and steadily ran out of the capabilities of those first two generations of databases, so there’s an entire new generation of database technology that’s coming to the floor now to support the more intensive, dynamic experiences. Think about what you do on your phone day to day and how much data is involved, along with AI and machine learning and a whole new generation of technology,” CMO Peter Guagenti told Built In. “It’s known with the large providers like Google Spanner and Azure SQL from Microsoft. We are, we believe, the leading data technology that is cloud independent.”
Cockroach Labs’ CockroachDB platform is cloud agnostic, which makes it easier for users like Bose, Comcast and Equifax to move and manage their transactional data in the cloud.
Since its 2016 launch, Cockroach Labs has raised $195 million. Guagenti says that, although the company has only been selling its product for two years, first-year customers have, on average, doubled their usage and renewed at a rate of more than 90 percent.
“That says that the engineering is sound,” Guagenti said. “What we’re seeing now is data-driven enterprise and people who can create dynamic experiences driven off of rich data are the ones who have dominated categories. Those requirements are now entering literally every enterprise. The data volumes have gone up dramatically and the expectations have gone up dramatically too. Now is the time where this change is going to occur. So investors are looking at us to say, OK, go try to take that share.”
Guagenti says Cockroach has managed to support companies across the spectrum in these “feast or famine” times. Businesses in industries like delivery and streaming are thriving amid the COVID-19 pandemic. Their customer base has exploded and demand for their products has increased very quickly, which means they need to have resilient, reliable technology to handle that influx.
“Whereas you look at something like the travel and entertainment industry and others that have been pretty hard hit by stay-at-home orders. Right now those folks are thinking about how to lower costs. They’re thinking about how to protect the business for the inevitable time we’re all able to get back to the lives we want to live,” Guagenti said. “Most of the people who are faced with these challenges have been in business for a long time, spending a lot of money on proprietary, on-premise, very large database contracts. We offer an alternative that is more flexible, more resilient and dramatically cheaper.... When times are hard, you will make a change if you feel that there’s substantial enough support and we’re starting to hear of those as well.”
Looking ahead, Guagenti says Cockroach Labs is in a good position to innovate on the enterprise database market, which is predicted to be worth more than $155 billion by 2026.
“Everything in the next 20 years is going to look very different with the rise of machine learning, AI, 5G, ubiquitous devices and all these things. We get to be part of something really, really exciting,” Guagenti said. “There’s very few opportunities where you can do something truly transformative. Like truly, truly transformative. We believe this is one of those once-in-a-lifetime opportunities to go build a multibillion-dollar company, doing really great work and being part of a meaningful transformation.”
