Database software maker Redis Labs hits $ 1 billion valuation with new fundraiser

Database software startup Redis Labs is Silicon Valley’s latest unicorn thanks to a new round of funding following strong pandemic momentum.

The Mountain View, Calif., Company said on Tuesday it had raised an additional $ 100 million to raise its valuation above $ 1 billion. The Series F cycle is led by TCV and longtime investor Bain Capital Ventures, with participation from Francisco Partners, Goldman Sachs Growth, Viola Ventures and Dell Technologies Capital. Redis Labs has now raised nearly $ 250 million in total since its inception nine years ago, and CEO Ofer Bengal has said the fundraising puts it one or two years away from IPO readiness. .

“For companies like ours, it’s all about rapid growth,” says Bengal. Forbes. “Like MongoDB, before they were made public, they burned about $ 350 million. The market rewards a lot of rapid growth, so we realize that in order to grow quickly, we have to spend. There is no way to get around that. “

Redis Labs sells software and cloud service based on Redis, an open source database. The product has been praised for its caching capabilities, in which applications can run faster by storing data that can be reused, but whose functionality has increased over the years. Paid customers, of which Redis Labs has more than 8,000 in industries such as finance, technology and healthcare, also rely on the Redis Enterprise product for different applications, such as complaints handling or messaging. Clothing retailer Gap relies on the database software for inventory management and order fulfillment, and Bengal says three of the world’s four largest credit card issuers use the product for authorization of customers. real-time transactions.

Software has its advantages in terms of speed and scalability, which are essential components for businesses to stay up to date with modern technology implementations such as machine learning. Bengal says Redis Labs, which he co-founded with CTO Yiftach Shoolman, is able to reduce application response times to less than a millisecond, compared to the hundreds of milliseconds required on databases. older generation such as Oracle or Microsoft SQL Server. But Redis Labs is not alone in its space. Data management companies such as MongoDB, DataStax, and Couchbase provide other ways for businesses to power applications and services, and although the company became a sponsor of the Redis open source project in 2015, other platforms -forms such as Amazon Elasticache offer other ways to use the database.

On the open source front, the timing of the roundtable also comes at a pivotal moment for the company. In June, Salvatore Sanfilippo (known in the coding community as “Antirez”), the main developer and maintainer of Redis, announced that he was stepping down. It remains to be seen how the open source project, which forms the backbone of Redis Labs’ paid offerings, will evolve as its creator’s architectural leadership is replaced by a new core team. Bengal remains optimistic, citing as precedent the transition of the Python coding language from a single creator to a team. “We built this new governance and this new team well in advance, so the transition went smoothly,” he says.

He also has reason to believe that the company’s expanded product vision is paying off. The startup’s revenue has grown by around 50% year-over-year over the past few years, he says, and now stands at nearly $ 100 million (the company says that her cash flow is not positive yet, but that she is “making progress towards profitability.”) The Covid-19 pandemic has not unwound growth; instead, Bengal says, he saw a spike new customers and reached a deal it sees as a cornerstone for future growth. In May, the company announced that it had partnered with Microsoft to integrate Redis Enterprise directly into the Azure cloud service. The move follows a similar partnership with Google Cloud which Bengal says has grown 300% since launching last year.

The new funding will go to sales and marketing, continued open source Redis sponsorship, and additional product innovation, Bengal said. The company announced in May the launch of an AI capability that the CEO said could be the other key market opportunity to seize. “Everyone was talking about technologies that make it possible to create very effective AI models,” he says. “It wasn’t until recently that people realized that there was another side to this, which is that once you have the model you have to serve it to the application in a very efficient way. At the moment, there is no market leader in this area. For us, it is very natural to expand on this.

“The market is almost unlimited,” says Enrique Salem, partner of Bain Capital Ventures, who has been on the board since 2019. “We are convinced that given the size of the market and given our position in the market, we will see a successful public company down the road.

Maria H. Underwood