SingleStore closed its F-2 funding round of $146 million, adding $30 million to the $116 million it raised in July.
With the $146 million, Goldman Sachs led the F-2 round, with Prosperity7 adding the latest $30 million as a new investor.
SingleStore is a database vendor founded in 2011 and based in San Francisco whose platform is designed to quickly ingest data and process queries and transactions.
Its tools work with both cloud and on-premises deployments. Competitors include databases such as MongoDB and the open source MySQL system developed and supported by Oracle as well as tech giants with database platforms, such as AWS, Google and Microsoft.
Recently, the database vendor unveiled an integration with analytics vendor SAS designed to improve speed-to-insight for joint customers.
Tough times for tech investments
SingleStore's most recent funding, made public on Oct. 3, comes at a time when the capital markets are struggling.
The Dow Jones Industrial Average is down more than 16% this year, and both the Nasdaq and S&P 500 have suffered even steeper declines through the first 10 months of 2022.
As a result, tech stocks are down along with the broader markets, numerous tech companies that were planning initial public stock offerings have put them on hold, and venture capital investment in technology has slowed. Pyramid Analytics, Qlik, SAS and ThoughtSpot are data and analytics vendors that have expressed interest in IPOs but not yet gone public.
SingleStore, however, has managed to secure $228 million in funding over the past 13 months in the three installments that make up its Series F and F-2 rounds, beginning with $82 million in September 2021.
That ability to raise funding as venture capital investing slows is a sign that the public markets respect SingleStore's technology and outlook, according to Matt Aslett, an analyst at Ventana Research.
The vendor has differentiated itself by developing SingleStore Universal Storage, which is a table capable of performing both transactional and analytics data processing. Many other vendors' platforms require separate engines to perform the different types of data processing, Aslett noted.
"There is still strong investor enthusiasm for data and analytics vendors. But the size of the total amount raised is certainly a validation of the opportunity for SingleStore and its positioning to support growing demand for intelligent operational applications infused with personalization and AI-driven recommendations," Aslett said.
The funding, meanwhile, has the potential to better enable SingleStore to compete for market share, Aslett continued.
"While SingleStore is quite well established, it is competing with some of the biggest names in the IT industry. And as a smaller player, it still needs to invest in growing its profile as well as sales, marketing and support teams to serve the needs of global customers," he said.
Marketing is one area where SingleStore plans to use its Series F-2 funding, according to SingleStore CEO Raj Verma.
Despite being in business for 11 years, Verma acknowledged that SingleStore, which changed its name from MemSQL in 2020, is not as well-known as some of its competitors. With the new funding, the vendor aims to change that.
Matt AslettAnalyst, Ventana Research
"We are still a pretty well-kept secret," Verma said, noting that the vendor has received positive feedback from developers when they use its tools. "The challenge is getting our product in the hands of developers. That comes through creating awareness."
Beyond increasing its marketing efforts, Verma added that SingleStore plans to use its Series F-2 funding to invest in product development, which includes adding more software engineers.
"First and foremost, we will invest in the rate of innovation," he said. " And the rate of innovation is directly correlated to the number of engineers we hire and the speed at which we hire."
Innovation efforts will center around the reliability of SingleStore's platform, making the platform faster and improving the user experience for developers, which Verna said is an area of concentration for the vendor.
While the speed of SingleStore's platform is a selling point, the vendor neglected the user experience somewhat as it concentrated on developing that speed.
Verna said the user experience of a database vendor like MongoDB is what SingleStore is striving for.
Finally, SingleStore will use some of the F-2 funding round money to fund global expansion with particular focus on the Asia-Pacific region, Europe and the Middle East, according to Verma.
While SingleStore plans to use the funding to grow, the added capital should also provide some stability should the capital markets continue to struggle and a recession develop, Verma said.
He noted that the vendor now has $221 million in reserve and has no plans to raise further venture capital funding. Instead, when and if market conditions become more favorable, SingleStore's plans to raise its next round of capital with an IPO.
"The public markets are going to be rather choppy for the next 18 to 24 months, so we have to ensure that our organization is well-funded for the next three to four years," Verma said. "Then, we can time our public debut accordingly without rushing into it."
Aslett, meanwhile, noted that despite the slowdown in venture capital funding in 2022, data and analytics vendors have been able to attract interest. For example, Dbt Labs raised $222 million in February and Pyramid Analytics raised $120 million in May.
That funding is a strong hedge against what could be tough economic times, and therefore it's not surprising that SingleStore raised more capital when it could.
"I have seen examples of organizations raising funding now while it is available in anticipation of what is expected to be a more challenging investment environment," Aslett said. "That may also be a consideration in adding the $30 million to the $116 million raised in recent months."