Big-data investors look for the next Splunk

SAN FRANCISCO (Reuters) - Splunk Inc's impressive debut on Nasdaq Thursday, where it doubled its $17 initial public offering price, has investors suddenly paying attention to a sector that has grown in relative obscurity: big data.

... Splunk allows companies to analyze data cheaply and simply, compared to the expensive data warehouses and specialized, hard-to-deploy technology they might have needed in the past.

From general business aspects to narrow sectors ranging from retail to healthcare to climate, the possibility of capitalizing off this data has the investment community excited.

... Most of the pure-play big data companies are still a couple of years away from IPOs, said Asheem Chandna at Greylock Partners, which invests in big data companies Cloudera and Sumo Logic. But he predicts stepped-up mergers and acquisitions of smaller big data companies in the short term, as well as blockbuster IPOs in the future.

"We're at the start of a decade-long run around new opportunities in big data," he said, singling out sub-areas such as analytics, business intelligence and automated pattern detection.

Greylock Partners fields around two dozen pitches a month from big data start-ups, more than double the rate of a year ago, Chandna noted.

... Splunk shares opened at $32, up 256 percent from the mid-point of the company's original IPO filing, valuing the business at about eight times forecast 2013 revenue. That is a lot higher than Jive Software, a recent hot software IPO that priced its offering at 4.7 times 2013 revenue, Tobiason noted.

While there are few pure-play big data companies nearing IPOs soon, Splunk's stock-market splash may encourage venture capital firms to invest more when big data firms look for new rounds of financing, Tobiason said.

VC firm Accel Partners launched a big data fund headed by Ping Li recently, but investors in other VC firms are likely asking how they plan to get more involved in the sector, he added.

Tableau is growing quickly and is likely considering an IPO some time next year, Ward added.

Curt Monash, an independent tech industry analyst, said he is busy meeting several big data companies, including Cloudera, Couchbase and Hortonworks.

"Cloudera probably has the second-best traction after Splunk," Monash said. "They have doubled in every metric you can measure them by. They have about 220 employees and a number of subscription customers. Subscription is the majority of their revenue now, which they are happy about."

Couchbase is part of a group of companies including 10gen that offer a hot type of database technology that can handle massive amounts of variable data, he added.

Other companies doing well in the big data space include MetaMarkets and Infobright, according to Monash.

Read more.

See also 5 Big Data Startups to Watch in 2012