The boom times for venture capital seem to be over. It’s not just media or analyst sentiment. Note that various venture capitalists agree that the slowdown is real – and could take several years.
Just look at Sequoia. On May 16, the leading VC company made a presentation to its portfolio companies titled “Adapting to Endure.” It noted that the economy is at a “crucible moment” and founders need to be wary of money burning rates.
Despite all of this, top venture capitalists understand that some of the best opportunities come during tough times. Moreover, many secular trends remain that will continue to drive growth.
One is data. There is little argument from CEOs that this is a strategic asset. However, there needs to be effective tools to derive value from data, and this will continue to drive investment in data startups into the future.
Here, we’ll look at five of the top venture capital firms for data – along with some insight into where they see current investment opportunities.
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Accel
Founded in 1983, Accel has invested in many categories in recent years, such as consumer, media, security, ecommerce and more. But the company also showed strong data chops.
Its most iconic investment took place in the summer of 2005. Accel agreed to invest $ 12.7 million in Facebook-now called Meta-for a 10.7% stake.
In terms of its enterprise data deals, these include companies like UiPath, Cloudera, Atlassian and Slack. As for recent investments, there is $ 60 million in Cyera funding. The company has developed a cloud -native data security platform that evaluates whether data – on AWS, Azure and GCP – is sensitive and vulnerable to risk. It does it all in real time.
Accel just raised a substantial $ 4 billion in funding focused on the final stages of the deal, an impressive demonstration of the confidence of the company’s limited partners (LPs). This is certainly a contrarian bet as this category of investments softened last year. But with valuations that are more attractive, the timing could be good for Accel.
Greylock
Another name with some remaining power, 24 -year -old Greylock Partners is dedicated to enterprise and consumer software companies. Investments cover the initial seed stages up to the later stages. In fact, the company will soften some of its deals with its offices. This is the case with companies like Palo Alto Networks, Workday and Sumo Logic.
One of Greylock’s best deals is for LinkedIn. The company invested in the startup – with less than a million members – a year after it was founded in 2004.
Then in 2016, Microsoft agreed to take over LinkedIn for $ 26.5 billion. Reid Hoffman, cofounder of LinkedIn, is currently a partner at Greylock.
An interesting recent funding for a data startup was for Baseten. The company’s system allows for quick and easy transition of machine learning to production applications. It automates complex backend and MLOps processes. Greylock participated in seed and Series A financings.
Sequoia
Sequoia is one of the pioneers of the venture capital industry. Don Valentine founded the company in 1972 and he raised his first fund a few years later. It’s not easy, because he needs to convince investors about the potential benefits of investing in startups. At the time, it was a relatively radical concept for institutions.
But Valentine has the ability to find the next big thing. For example, he was an early investor in Atari and Apple.
This is just the beginning. Sequoia will have one of the best track records in venture capital. Just a few of its big winners are Snowflake, Stripe, WhatsApp, ServiceNow, Cisco, Yahoo! and Google.
Undoubtedly, a large part of the investment thesis for Sequoia is in the data. For example, in early June the company led a $ 4.5 million seed round for CloseFactor. The startup uses sophisticated machine learning to customize sales pitches and target the right prospects. The system showed 2-to-4 times improvements in the quality of the pipelines.
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Andreessen Horowitz
It usually takes at least a decade to become an elite venture firm. The reason is that early stage investments usually take a lot of time to generate breakout returns.
But for Andreessen Horowitz, it has managed to be a select company in a matter of years. And again, it certainly helped that its founders were visionary entrepreneurs Marc Andreessen and Ben Horowitz.
However, they also set out to disrupt the traditional model for venture capital. For example, it set out to work like a Hollywood talent agency. Andressen Horowitz hires specialists to assist entrepreneurs in many parts of their business, such as PR, sales, marketing, and design.
The formula wins. Some of Andressen Horowitz’s well -known investments include: Stripe, Databricks, Plaid, Figma, Tanium and GitHub. And yes, many other venture capital firms are mimicking the model.
As for a recent data deal from Andreessen Horowitz, there is $ 100 million in Series D funding for Imply Data (the valuation has reached $ 1.1 billion). The company’s founders are the creators of Apache Druid, which is an open source database for analytics applications. At Imply, it focuses on the huge market for developers developing analytics applications.
Andreessen Horowitz definitely has a lot of fire power for many more deals. In January, the company announced $ 9 billion in new capital for venture opportunities, growth stages and biotech.
Lightspeed
Lightspeed began in the depths of the dotcom bust – October 2000. But the time will be right. The company has fresh capital and the appreciations are more attractive.
In the early days, Lightspeed focused on consumer startups. For example, it was an early investor in Snapchat. Lightspeed contributed $ 485,000 to the seed round.
Over the past decade, however, Lightspeed has increased its game using enterprise software and infrastructure opportunities. Some of its notable deals include AppDynamics, MuleSoft, and Nutanix.
Among the recent data deals for Lightspeed, Redpanda Data is one that stands out. The venture capital firm led the $ 50 million Series B round. Redpanda has built a streaming platform for developers. Think of it as a record system for real-time and historical data.
In 2020, Lightspeed raised three funds for a total of $ 4.2 billion. The company is now seeking approximately $ 4.5 billion for its next range of funding vehicles.
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