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Ocient raises $49.4M in funding to fuel development, growth

The data platform vendor plans to use the new financing for product development and to fund sales and marketing efforts as it moves into its growth phase.

Ocient on Monday raised $49.4 million in venture capital financing, which the vendor plans to invest in product development.

The funding, led by Greycroft, OCA Ventures and four other investors, is an extension of Ocient's Series B round and brings the vendor's total funding to $119 million. Ocient began its Series B round by raising $15 million in June 2020 and $40 million in January 2021.

Based in Chicago, Ocient is a 2016 startup whose Hyperscale Data Warehouse enables customers to efficiently store and analyze data at scale.

The vendor's Compute Adjacent Storage Architecture aims to remove data bottlenecks and enable fast access to structured and semi-structured data. In addition, Ocient provides always-on data ingestion and integration capabilities and in-database AI and machine learning with OcientML.

Similar vendors include such as Snowflake and Databricks whose tools also enable storage, analysis, machine learning and AI. In addition, SingleStore and Teradata are competitors.

Meanwhile, Databricks has raised billions in funding while Snowflake has raised billions through first funding and then a record-setting IPO, noted Stephen Catanzano, an analyst at TechTarget's Enterprise Strategy Group.

But given that Ocient more than doubled revenue during its last fiscal year -- after 171% growth the previous year -- the new funding should help the vendor continue its growth trajectory.

"Snowflake raised billions in comparison," Catanzano said. "[Nearly $50 million] was once a lot of money. But it should help Ocient get customers and grow revenue."

Donald Farmer, founder and principal of TreeHive Strategy, likewise said $49.4 million is a significant amount for Ocient, which it can use to fund a variety of initiatives such as product development and marketing.

"For a growth-stage startup, this is a substantial cash infusion for meaningful expansion," he said. "It's not just an incremental raise. Ocient can use this funding to scale its go-to-market efforts, grow sales and marketing, expand its product and engineering teams to accelerate the roadmap, and potentially pursue new opportunities like international expansion or vertical solutions."

The vendor in December 2023 introduced OcientGeo, a portfolio of spatial database capabilities designed to enable customers to query and analyze geospatial data at scale. The vendor's most recent Hyperscale Data Warehouse update was in May 2023 when it added new data integration and movement capabilities.

Fuel for the future

With nearly $50 million in new funding, Ocient plans to increase its investment in product development to further its growth.

Specifically, the vendor will use the money to foster its transition from its early stage to its growth stage, according to co-founder and CEO Chris Gladwin.

Gladwin, who helped found three companies before Ocient, noted that a company's early stage is when it must prove itself. It needs to show that its capabilities work and that they are differentiated enough from existing companies to be of interest to potential customers.

Ocient's differentiation is its focus on hyperscale computing, Gladwin continued.

The vendor's platform is essentially a software engine for data analysis that aims to store, transform and analyze data at high volumes. However, to stand out enough from more established vendors, Ocient's platform must be multiple times more efficient at handling massive data workloads.

"No one is going to care if we have a 30 percent better price/performance ratio than Google, Amazon, Microsoft, Databricks or Snowflake," Gladwin said. "No one is going to buy that. We have to be multiple times better because it's a giant hassle for a telecom or intelligence agency to work with a new vendor. It has to be transformational."

Toward that end, Ocient has made the hyperscale market its focus while broader data platform vendors tailor their tools to a wider audience. That includes hyperscale machine learning, which fuels predictive AI models and other AI applications such as the domain-specific language models some enterprises are training to use generative AI with their own data.

The overall market for data management and analytics is about $250 billion, according to Gladwin. However, only about $25 billion of that is hyperscale. By concentrating specifically on that hyperscale market, Ocient is attempting to stand out.

Now that Ocient has proven itself to users and is moving into its growth stage, Gladwin said the vendor plans to invest in improving its existing capabilities and add new domain-specific applications for its platform such as climate intelligence.

In addition, the vendor plans to increase sales and marketing efforts to grow its customer base.

"The funding is for the growth stage, which is doing what we've done but doing more and more of it," Gladwin said. "It primarily comes down to sales, marketing and development."

Meanwhile, Ocient's latest funding comes at a time when investors are hesitant to fund startups, including technology vendors.

Tech vendors attracted significant capital through 2022. For example, AI hardware/software provider SambaNova raised $676 million in April 2021, event streaming specialist Confluent attracted $828 million in June 2021 and analytics vendor Sigma Computing raised $300 million in January 2022.

Then, however, at the same time there was a selloff on tech stocks, funding for startups -- including tech vendors -- slowed significantly and remains difficult to attract.

Ocient's ability to raise investor capital amid current conditions therefore reflects well on the company, according to Farmer.

For a growth-stage startup, this is a substantial cash infusion for meaningful expansion. It's not just an incremental raise.
Donald FarmerFounder and principal, TreeHive Strategy

"Securing nearly $50M in the current climate is a strong vote of confidence," he said. "Competition in their space is very tough and their differentiation is ringing the right bells with investors. Complex mixed workloads -- tough to do on any platform except Teradata -- and [its focus on sustainability] are quite compelling."

Catanzano, meanwhile, noted that Ocient's focus on providing capabilities for AI workloads makes it appealing to investors, he continued.

"Money is going in that direction," Catanzano said. "Snowflake, Databricks and all the clouds are chasing these workloads too. Ocient is showing a dedication to this segment which requires speed and scale and at a price and performance that competes. There is a lot of opportunity to chase."

To attract funding in the current investment environment, Ocient had to prove itself to investors, Gladwin said.

Before the vendor could secure its latest funding, investors heavily investigated Ocient, including calling customers and previous investors, who closely examined the vendor's financial status and had technical experts do deep inspections of Ocient's tools.

"They're doing their homework," Gladwin said. "If you want to raise anything like $50 million, you cannot have any flaws in the business. It wasn't like that in 2020, but it's like that now."

Next steps

As Ocient plots its roadmap, adding domain-specific capabilities is one area of focus.

Competitors that offer industry-specific versions of their platform include Databricks and Snowflake and Ocient does the same. To date, the vendor offers versions of its Hyperscale Data Warehouse for advertising, financial services, geospatial analysis, government, IT and telecommunications.

However, more than adding new capabilities, as it moves into its growth phase, Ocient is focused on improving the ones it already offers, according to Gladwin.

For example, the vendor is working to add more power to make running hyperscale workloads more efficient.

Farmer, meanwhile, said that Ocient would be wise to expand its partner ecosystem so that customers can develop data systems using the vendors of their choice in concert with Ocient. In addition, expanding engineering efforts and sales and marketing initiatives are areas Ocient can improve, he continued.

Catanzano likewise said that Ocient should focus on increasing sales.

He noted that because funding remains difficult to attract, it's important that Ocient not be in a position in which it needs to raise more investment capital. That means continuing to grow sales and revenue.

Continuing to invest in AI, including generative AI, is one way for Ocient to appeal to potential new users and become more profitable.

"[Ocient should] focus on sales to get profitable if it's not there yet," Catanzano. "It's hard to raise money so it needs to not need to go back for more. The market [for new customers] is there. There's lots of opportunity for AI workloads but a lot of competition. If Ocient has better price and performance, it can win sales."

Eric Avidon is a senior news writer for TechTarget Editorial and a journalist with more than 25 years of experience. He covers analytics and data management.

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