Confluent, an open source cloud data streaming startup, announced it closed a $125 million funding round this week, hiking its overall value to $2.5 billion.
Founded in 2014, Confluent grew total subscription bookings by 3.5 times last year and expanded into 11 countries, according to a blog by CEO and co-founder Jay Kreps.
The company was founded by the original creators of open source Apache Kafka, a distributed streaming messaging system which has grown explosively and is now used globally by enterprises to replace traditional batch messaging systems.
By any standard for tech startups, Confluent’s performance is noteworthy. The $125 million in Series D funding, led by Sequoia Capital, “builds on what was truly a fantastic year for Confluent,” Kreps said. The employee base roughly doubled in 2018, he added. Although revenues and head count are not disclosed, industry estimates put the startup’s work force at about 200.
Demand for Real-Time Data
Confluent’s rise can be attributed largely to the demand by enterprises for real-time event streaming to use data for better business decisions. These “events” are things like orders, sales, and customer experiences.
The Palo Alto, California-based company says 60 percent of Fortune 100 companies use this type of event streaming platforms. And its own customers include Audi, Capital One, JPMorgan Chase, and Priceline, among others.
Audi uses the Confluent Platform and Kafka to support its autonomous car development. “Our autonomous cars process 4 terabytes per day per car,” said Stefan Bauer, head of development data analytics at Audi Electronics Venture, in a statement. “We need to know what events took place to make decisions.”
Audi has built applications that include a fast data IoT platform, real-time data analysis, swarm intelligence and predictive artificial intelligence (AI). “Confluent Platform and Apache Kafka will continue to help us scale as we’re on our mission to be completely data driven,” Bauer added.
The latest funding will help Confluent further build its event streaming software and expand the cloud services that deliver it, Kreps said. Last year, the Confluent cloud offering was made generally available on Amazon Web Services (AWS) and Google Cloud. Confluent Platform is also used on premises.
Confluent has “driven” adoption of Kafka, which first emerged in 2010 at LinkedIn, according to a research note written last May by Matt Aslett, an analyst at 451 Research.
“Key enhancements to Kafka over the years have made support for an event-driven enterprise a reality,” Aslett wrote. “Rather than treating messages as a point-to-point event-response notifications, Kafka was able to support multiple applications that communicate and share streams of events.”
Confluent has created KSQL, a streaming SQL engine for Kafka and has added security, management and replication functions in its Confluent Enterprise and Confluent Cloud offerings, he noted.
Taking On Cloud Giants
The startup has lately battled with large cloud services companies. Confluent introduced a new software license called Confluent Community License last month, which limits the ability of vendors to take Confluent’s open source software and sell it as a service.
That license approach followed AWS’ November announcement to take open source Kafka and resell it as a service.
Confluent’s funding announcement comes as another open source company — Citus Data — was acquired by Microsoft this week.