When a tech company raises a $54 million round, it says a lot about how much promise investors see. But when the financing round is led by the same big-name venture capital firm for the third time in a row, it says even more.
And yet, for all the promise investors see in DataRobot, the Boston machine learning startup has been very quiet and even cautious about sharing any figures showing its traction. But thanks to a source close to the company, we now know why New Enterprise Associates, which led the first close of DataRobot's Series C round, could be so enthusiastic.
DataRobot announced the financing round on Wednesday, which brought the company's pre-money valuation to over $250 million, according to the source. The $54 million round brought the company's total funding amount to $111 million. Other investors have included Accomplice, Intel Capital and New York Life Insurance.
Here are some numbers fueling investor excitement: The company's revenue in the fiscal year 2016 grew nearly nine times over from the previous year, going from roughly $2 million in 2015 to close to $20 million last year, according to my source. It now has over 400 customers, with half of them Fortune 500 companies and many of them large banks and insurance companies, the source added. One of its larger customers is Bank of America.
The source spoke on the condition of anonymity because they were not authorized to speak on behalf of the company.
The company declined to comment on its valuation, revenue and customers.
Prior to BostInno receiving this information, Razi Raziuddin, vice president of strategic business development at DataRobot, declined to discuss these items in an interview. Instead, he pointed to the New Enterprise Associates leading a financing round for the company a third time as a sign of its success. “That should give you an idea,” he said.
DataRobot plans to use the new funds to double the size of its research and development, expand its global footprint to support its growing number of international customers, and increase support for its global channel and technology partners, which includes Cloudera and Alteryx.
The company has about 150 employees right now. While Raziuddin declined to provide specific hiring plans, DataRobot co-founder and CEO Jeremy Achin told Xconomy it could reach 250 people by the end of the year.
If the company continues to grow its sales, Achin said the company could reach profitability without raising more capital. However, he also told Xconomy that the company could add another $12 million to $15 million from investors for this round.
DataRobot’s machine learning software helps large companies glean predictive insights from massive amounts of data by automating many of the tasks performed by data scientists. Raziuddin said the company is “democratizing data science,” an overused phrase, he admitted, that nevertheless helps illustrate how business analysts and other professionals with less technical expertise can use DataRobot to build predictive models.
“The goal here is to get data science into the hands of everyone in a business environment, so they can optimize every business process instead of having to rely on a data scientist for every model,” he said.
Besides banking and insurance, DataRobot is also targeting the healthcare and financial technology industries.
Chris Lynch, who funded DataRobot’s seed round through Accomplice, the VC firm he left earlier this year, told me the company’s progress validates "Boston as a force to be reckoned with in data science." He said it also validates the original vision behind Hack Reduce, the big data startup incubator Lynch runs that admitted DataRobot in its earliest days.
Lynch said he remembers originally turning down Achin and his co-founder Tom DeGodoy when they pitched to join Hack Reduce. But after Achin and DeGodoy managed to find Lynch at Tryst, an Arlington restaurant that was near Lynch's house, they pitched him again and Lynch agreed to fund DataRobot's seed round.
"He didn't give me a choice," Lynch said of Achin.
