In 2013, the zeitgeist around big data hit a fever pitch, and with that surge came venture capital love for the Hadoop ecosystem – to the tune of $270 million. On a year-over-year basis, Hadoop VC funding grew 50% while deal activity rose 30%. The rise in Hadoop funding last year came after a notable $65M late-stage deal to Tech IPO Pipeline company, Cloudera, by investors including Accel Partners, Greylock Partners and Ignition Partners in late 2012, the largest in the space to date.
The majority of funding growth in the Hadoop market in the last year came at the Series A stage. On a year-over-year basis, Series A deals grew 60% in 2013 indicative of the nascency of the Hadoop startup ecosystem. Mid-stage deals took just under 35% of Hadoop deals in the past two years and may translate to more late-stage deals if IPO pipeline candidate Cloudera is able to propel itself to a successful exit.
Despite the influx of overall funding dollars to the Big Data platform, there are just a handful of VCs that are going all in on Hadoop startups. Using CB Insights data, we identifed four venture firms Lightspeed Venture Partners, Accel Partners, Andreessen Horowitz and Atlas Venture that have invested in more than two Hadoop-related startups. In-Q-Tel, the venture fund of the CIA, has also made strategic investments into three Hadoop companies, Platfora, Cloudera and Quantum4D.
VC funding has been concentrated among a smaller group of Silicon Valley VCs and so it’s not surprising that the geographic distribution of Hadoop startups is also quite Valley-oriented. In fact, over 70% of Hadoop deals in the past two years went to firms in the Bay Area. SoCal, NY and Massachusetts each saw just a handful of financings. Of note, Silicon Valley has also taken the large majority of mid/late-stage deals in the space thus far. The average deal size over the past two years has trended at close to $14M.
A list of the top 20 most well-funded commercial Hadoop startups can be found on the ‘Research’ tab, after logging in to CB Insights. This research is only available to paid subscribers with access to CB Insider.
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