the $70bn tech company you’ve never heard of

Linda J. Dodson

You may have never heard of it, but cloud company Snowflake made Wall Street history overnight as the largest ever software stock market debut. 

The California-based virtual data warehousing service notched up a valuation of $70bn on its first day of trading as a blizzard of buying doubled its initial share price and made its cofounder Benoit Dageville and chief executive, Frank Slootman, instant billionaires. 

It was a marked departure from the recent trend of disappointing public debuts such as that of Uber, whose shares were repeatedly written down before floating at a price that has since fallen by as much as half.

“It’s a validation of our initial vision,” says Dageville, a 16-year veteran of the database giant Oracle who co-founded Snowflake in 2012 and now serves as its chief technology officer. 

 “From day one everyone said we were crazy, no way you can do what you want to do… [it’s] very ambitious, of course. But I would say we are just at the beginning of implementing that vision.”

Investors, clearly, agree. Technology companies have become hesitant to go public, even before Covid-19 caused the economy to wobble, due to a surplus of private capital. 

But backing from Warren Buffett, who has frequently scoffed at jumping in on stock market debuts, suggests Snowflake might be more than just froth. 

One reason may be down to the type of customers it attracts. Consumer software, such as Uber, Pinterest, Facebook or Twitter, is at the beck and call of flighty individuals who are attracted by gimmicky discounts and pose the risk of deleting an app without much thought, diminishing a company’s user growth and revenue stream. 

Business customers, whom Snowflake counts on, spend more and are more loyal, making businesses who deal with them a more valuable, long term prospect. 

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