I’m super proud to announce that DataSift has just completed a $42 million financing round coming at the end of a year where its revenue grew several hundred percent year-over-year. Considering our revenue is SaaS revenue this achievement is even more remarkable.
The timing of the announcement of this investment couldn’t have been timed more perfectly if we tried. Yesterday it was announced that Apple had acquired one of our competitors, Topsy, for more than $200 million. As this astute journalist pointed out, DataSift “likely would have cost a lot more to acquire.”
What gives? Why all the fuss about the Twitter firehose?
I started announcing my Twitter thesis back in 2011 (still serves as a useful read today). I stated that Twitter provided:
- Object Communications (now often called “the Internet of Things”)
- Predictive Data
- Augmented Data
And before that you might enjoy this longer analysis on why I invested in DataSift in the first place, which was written 2.5 years ago and still rings true today, stating the unique Twitter attributes that are disruptive:
- Real time
- Location Aware
- Referral Traffic
- Explicit Indicator (intent)
- Implicit Indicator (what can you infer about me)
If you want details to the bullets they’re in the posts above.
Put simply, the amount of public, real-time information that is now being created by hundreds of millions of users and soon billions of objects will change the way every major business, organization or government must operate.
It isn’t simply that when a leader in the US calls off negotiations with Iran he puts it on Twitter or when a leader from Iran rebuffs that Tweet publicly that a signal is created but it is the unseen. It is the oil pipeline explosion in Nigeria that is Tweeted before people even know a disruption may happen. It is the fact that somebody follows hate groups on Twitter and not commensurate opposing views and is about to be part of a selection group to be considered in an important trial. Those are the obvious cases.
But what if you’re a credit card company and you want to know where to find your next customers? Wouldn’t it make sense to look for graduation Tweets from high school or college? If you’re an auto dealer wouldn’t you want to ring-fence Tweets in your geography and look for keywords like “crashed my car” “totalled” or “thinking about buying a new car. should I go Audi or BMW?”
How can businesses not incorporate information into their marketing and sales funnels? How can governments not track hooligans, terrorists or criminals who give off public information.
Some startups I talk with mistakenly believe you can poll the Twitter API directly to get the feed but the Twitter API isn’t full fidelity, doesn’t have the full historical data corpus and isn’t real time.
But here’s the thing I love the most about DataSift and why we never would have considered selling for anything like $200 million.
Twitter is just the beginning.
DataSift is a real-time data processing platform that can be used with any data source including your internal data. It’s one thing to have “big data” initiatives with terabytes of data stored to query at any moment. But in a world where time is critical to decision-making and much of the data is flowing through public & private systems and perhaps not even in your data store yet - I believe real-time processing of data will become as valuable as big data storage itself.
Already two thirds of our customers are ingesting two or more data sources including Facebook, Tumblr, WordPress, Bit.ly and so on, and we do private implementations with the likes of Yammer and others.
For technical teams we have a scripting language that allows teams to build complex queries from multiple data sources and ingest them in one single API stream. For marketers or business professionals we build a visual query builder that allows you to select data sources and human language queries against data and we will do the data extraction for you (and auto-generate the query language if your tech team wants to maintain or edit it).
No other vendor in the market allows a single API, a scripting language and a visual query builder and it’s these and other feature sets that have seen DataSift grow at the astronomical pace it has grown at.
And from an investment perspective I remain incredibly long DataSift. I’m an early-stage investor. I normally look to invest my first money below a $20 million valuation and when deals get to lofty prices I normally bow out to later-stage investors who have deeper pockets.
Not so with DataSift. We co-led the A-round with IA Ventures. We co-led the next round with IA Ventures without even asking other VCs to participate so we did an A-1 round. We knew we had a winner. In the B round we invested the maximum amount we could alongside the lead - Scale Venture Partners. And even in this growth equity round led by Insight Partners we asked for our full prorata investment and took as much as we were allowed to.
Obviously I can’t predict the future and it’s up to the great team at DataSift to continue to execute as well as they have to date. What I am certain of is that real-time processing of big data (both public & private) is going to build some multi-billion dollar companies. And I believe we have as good a shot as anybody.
If you want to read the company’s take on their funding their official announcement is here.
It’s also worth noting what a great win this has been for the UK as our tech & product teams are still based outside of London and we continue to grow those operations under the guidance of Nick Halstead and Tim Barker. In short order that team will top 100 professionals as will our US operations headquartered out of San Francisco.
Huge congrats to everybody at DataSift whom I’ve enjoyed working with so much over the past 2.5 years. Nick - the incredibly visionary behind the company and our technology. Rob - the CEO who came on pre-revenue and build out an amazing organization. Tim, my former co-founder and long-time colleague & friend who joined as global head of products. Pier who has built a world-class sales organization and processes. Ming who the hero of so many customers whose primary reference to other customers is, “make sure you get a Ming.” Steve. Andrew. Lorenzo. And a host of many other people I’m leaving out.
I’d also like to express my gratitude to the great friends, investors and board members on one of the most active boards I’ve been involved with. Roger Ehrenberg. Rory O’Driscoll. Chris Smart. You’ve been marvelous.
Now can we please do at least one board meeting in LA?!?
This article was originally published on Mark Suster's blog, Both Sides of the Table.