Sunnyvale, California-based SQL database developer Yugabyte secured a $48 million funding round after seeing increased traction with large enterprise customers and just nine months removed from its $30 million Series B.
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The decision to raise a new round so soon after the Series B came after a handful of large enterprise customers expanded their workloads with the database developer just as more large companies were approaching Yugabyte about becoming clients, said co-founder and CTO Karthik Ranganathan.
The increased demand made the company seek out a new round — which the founders originally earmarked to be around $15 million to $20 million. However, due to investor interest, the company raised more than twice that amount to expedite sales of its new cloud product, increase research and development, and expand further into the EMEA and APAC markets. The company also announced it had recently acquired India-based Falarica.io, which it expects will help in recruiting efforts in the APAC region.
While many companies in sectors ranging from financial services to retail have been taking most of their business processes to the cloud the last several years, a lot of companies were slow to move their databases, said co-founder and president Kannan Muthukkaruppan.
However, that changed last year and Yugabyte saw an uptick from large enterprises trying to modernize their application development and work in a multicloud environment.
“COVID really accelerated the process of moving to the cloud,” he said.
Yugabyte does not release revenue figures or exact customer numbers, but Ranganathan said the company has “dozens of customers.”
Founded in 2016, the 100-person company has raised $103 million to date. Lightspeed Venture Partners led the recent round, with additional participation by Greenspring Associates, Dell Technologies Capital, Wipro Ventures and 8VC1.
Ravi Mhatre, founder and managing director of Lightspeed Venture Partners, said the growth in customers, the market and the leadership team made Yugabyte an attractive investment for his firm. He sees an even brighter future ahead for it.
“As a leader for the emerging distributed SQL market, Yugabyte has the potential to be a ‘next generation’ Oracle database platform,” he said. “This is an extremely large market that could easily support a $25 billion to $50 billion public company.”
With other database and analytics companies such as MongoDB having a market cap of more than $23 billion and Snowflake having one of more than $77 billion, Yugabyte sees no reason it cannot grow to a similar size, although it may take time.
“The database market is not for the faint of heart,” Muthukkaruppan said. “It is a very slow journey. But we know if we do this right there is a massive opportunity.”
Illustration: Li-Anne Dias.
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