A new product from one of the hottest tech startups is geared toward 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.
The Snowflake Data Exchange, which was announced over the summer at the company's annual conference, has already nabbed the hedge fund Coatue, the data giant FactSet, and the $53 billion asset manager Causeway Capital Management as early adopters of the new marketplace.
The startup's new offering is run by Matt Glickman, the vice president 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," Glickman said 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 firms remain cloud-agnostic. In May, 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 served as an introduction to data providers who hadn't previously worked with the startup. As more consumers of data look to ingest data via the exchange, they're pushing their own providers to list on Snowflake as well, which is helping grow the market, he added.
The benefits go beyond just getting new customers on board. The data exchange also allows the startup to interact with a different part of customers' businesses, Glickman said.
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 to consumers of data who make 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?'"
