Confluent’s IPO brings a high-growth, high-burn SaaS mannequin to the general public markets – TechCrunch

Confluent’s IPO brings a high-growth, high-burn SaaS model to the public markets – TechCrunch

Slowing development and money consumption steadiness a historical past of blistering growth

Confluent grew to become the newest firm to announce its intent to take the IPO route, formally submitting its S-1 paperwork with the U.S. Securities and Alternate Fee this week. The corporate, which has raised over $455 million because it launched in 2014, was most not too long ago valued at simply over $4.5 billion when it raised $250 million final April.

What we are able to see in Confluent is sort of an old-school, high-burn SaaS enterprise. It has taken on oodles of capital and used it in an more and more costly gross sales mannequin.

What does Confluent do? It constructed a streaming information platform on high of the open-source Apache Kafka undertaking. Along with its open-source roots, Confluent has a free tier of its business cloud providing to enhance its paid merchandise, serving to generate top-of-funnel inflows that it converts to gross sales.

Kafka itself emerged from a LinkedIn inner undertaking in 2011. As we wrote on the time of Confluent’s $50 million Series C in 2017, the open-source undertaking was designed to maneuver huge quantities of knowledge on the skilled social community:

At its core, Kafka is just a messaging system, created initially at LinkedIn, that’s been designed from the bottom as much as transfer huge quantities of knowledge easily across the enterprise from software to software, system to system or on-prem to cloud — and take care of extraordinarily excessive message quantity.

Confluent CEO and co-founder Jay Kreps wrote at the time of the funding that occasions streaming is on the core of each enterprise, reaching gross sales and different core enterprise actions that happen in actual time that transcend storing information in a database after the actual fact.

“[D]atabases have lengthy helped to retailer the present state of the world, however we predict that is solely half of the story. What’s lacking are the regularly flowing stream of occasions that represents all the things taking place in an organization, and that may act because the lifeblood of its operation,” he wrote.

That’s the place Confluent is available in.

However sufficient concerning the expertise. Is Confluent’s work with Kafka an excellent enterprise? Let’s discover out.

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