MapR CEO John Schroeder MapR
The atmosphere in the venture investment community is a strange one right now.After years of pouring money into startupsat often shockingly high valuations, sentiment has cooled.
Investors still want to see revenue growth (as they always have and always will), buttoday they want that growth to be coupled with a common-sense business model that's generating plenty of cash andis marching toward profitability.
Show them that, and they'll line up to invest in your company,John Schroeder, founder and CEO of MapR tells Business Insider.
That's what happened to him.
MapR just announced that it raised another $50 million in investment, bringing its total raised to$194 million.MapR wouldn't disclose the company's new valuation (which is sometimes a sign that the terms for a new investment weren't as great as they were in previous rounds). But he says that finding investors was relatively easy.
He simply showed up at his current VC's meet-ups with its limited partner institutional investors, gave them details about MapR's financials, and the term sheets came to him.
"Most of the companies founded around 2007 to 2010, they got pulled into these bad business models of support and services and they burn tons and tons of cash," Schroeder says. "We're growing [revenue] at 100%. We've got a few quarters until we're cash flow positive, but our cash burn is really low. That's the combination investors want to see." Selling software, not servicesMapR's product helps companies run big data apps, but it's a rare bird among startups that sells to businesses these days for another reason: It sells actual software instead of a cloud service.
Software is still a high margin business. A company can install MapR into theirown data centers or onto a cloud like Amazon or Microsoft. Some 90% of its revenues come from software licenses, he says.
MapR'sclaim to fame is onesoftware app that does it all: stores the data, analyzes it, and runs apps against it. For instance, MapR is popular with ad tech companies because it can store the ads, and run 100 billion ad auctionsa day and do the analysis on ad performance, Schroeder says.
But MapRwasn't always an investor favorite.
The company started out as a direct competitor to Cloudera in the world of Hadoop, another popular big data technology. AndClouderawas once a beauty queen among investors.By 2014, Cloudera had raised over $1 billion from VCs.
"That was the hardest thing about running MapR. I started it about seven years ago and other players in the market were spending at some ridiculous clip at the market," he says.
While he was focused on building his product, his competitors were "spending huge amounts. They were over investing in sales and marketing and that doesn't have a lasting value."
But with the tables turned, and investors looking for companies with strong financials, MapR is back in vogue.
"The investors are hungry. They have to put money money to work and they're not being given very many high quality opportunities. And they have gotten burned from the grow-at-all costs, cash burning companies," he said.
The leadinvestor for this $50 million roundwas Future Fund, a fundfrom theAustralian Government whichdoes growth investments for pension plans and other government assets. Existing investorsGoogle Capital, Lightspeed Venture Partners, Mayfield Fund, New Enterprise Associates, Qualcomm Ventures, and Redpoint Ventures also participated.
MapR last raised funds in 2014, when it raised $110 million led by Google Capital , also at an undisclosed valuation.