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Redis Labs revealed Tuesday that it raised a new $100 million round of funding to build out Redis, one of the most widely used data caching technologies.
In recent years, the open source Redis database has grown beyond its caching roots to provide more data management and artificial intelligence capabilities.
Backing the development of Redis is privately held Redis Labs, based in Mountain View, Calif., which provides commercial tools and enterprise support offerings as well as cloud services. In May, the open source database vendor unveiled a series of new initiatives, including RedisGears, a serverless transaction engine.
The open source Redis project has also recently undergone a management transition, with Redis creator Salvatore Sanfilippo stepping down from day-to-day leadership of the project on June 30. The Redis project now has a new governance model that includes participants from Redis Labs as well as the broader Redis community.
Redis Lab's new funding round was co-led by Bain Capital Ventures and TCV, and includes existing investors Francisco Partners, Goldman Sachs Growth, Viola Ventures and Dell Technologies Capital.
The sizeable round of financing is seen as a likely prelude to an initial public offering (IPO).
In this Q&A, Ofer Bengal, co-founder and CEO of Redis Labs, discusses the state of the market and where his database firm is headed.
Why are you raising $100 million now?
Ofer Bengal: We want to grow very aggressively and in order to do that you need to spend primarily on sales and marketing, but also on product development. So we decided that we need more money. A year and a half ago we raised $60 million and we still have a significant portion of that in the bank, but we thought that strengthening our financial position is a good idea.
We started the process in March and COVID was already present and I realized after a relatively short time, that it's the worst possible time to raise money. So we decided to abandon the process and postpone it to some sometime in the future. But what happened is we were approached by investors and the conversation developed very quickly.
What has been the impact of COVID-19 on Redis Labs?
Bengal: With COVID, we have seen two conflicting trends.
On one hand, with mid-market, startup companies and such, we definitely saw some of them reduce their consumption of Redis Enterprise [the commercially supported version of Redis]. But at the same time, we saw an influx of new customers that have never done business with us before that wanted to increase their online footprint.
Ofer BengalCo-founder and CEO, Redis Labs
Where and how are you seeing Redis technology being used today?
Bengal: There is the traditional enterprise caching, but then we also have front-end database use cases. These are use cases where Redis is the only source of data, but the data is not stored forever; rather it's some sort of transient data. Those are things like session store and e-commerce shopping carts.
Another use case is using Redis as a primary database, where Redis is the only database used for an application. Caching is a great business, make no mistake about it, but I think that what we want is to have more database use cases because it's more strategic for customers.
What has been the impact of Redis creator Salvatore Sanfilippo stepping back from leadership of the open source project?
Bengal: We fully understood the decision; after 11 years of doing Redis, he got a bit tired and wanted to do other things. The decision was a joint decision and we worked for almost a year to prepare and build governance for the project to carry on after he left.
Today we have a team that leads the continuous development of the open source project, which is comprised of two people from Redis Labs, one from AWS and one from Alibaba. I think that the community fully understood and embraced this change and there hasn't been any negative response.
How do you view the cloud and the risk from a cloud service provider that simply takes Redis open source and runs it as a service?
Bengal: You know, we were born into this reality. AWS had a Redis service even before we started Redis Labs back in 2010, so we had to deal with this issue from day one.
So what we have done is focus on taking Redis beyond just caching. For AWS, Redis is only for caching, since they have other databases for different use cases. Also we are now cooperating with AWS competitors, with Google and Microsoft partnerships.
What's next for Redis Labs? Where do you go from here?
Bengal: In terms of technology, we have put a lot of effort into artificial intelligence, more specifically with a technology we call RedisAI.
We think this is a natural expansion for us since Redis is used by companies all over the world to serve data to applications in a fast manner. Now expecting Redis to serve the data to the application with an AI model, this is very natural expansion.
Generally speaking, we would like to continue growing the company and an IPO is definitely on the table.