TheChek News Flow

Investors have reaped billions of dollars in gains from backing database software firms Snowflake and Databricks. Now venture capitalists are circling ClickHouse, a startup some investors believe could rival the incumbents, particularly as the rise of artificial intelligence increases demand for its database software.

The startup is in talks to raise at a $6 billion valuation, triple that of four years ago, according to two people with knowledge of the deal. New investor Khosla Ventures is in talks to lead the round, which is likely to be in the hundreds of millions of dollars. The deal isn’t finalized and terms could change.

ClickHouse software stores and manages digital event data, such as when a person clicks a button or fails to log in to an app. AI developers are also in need of this data: ClickHouse has said coding copilot Poolside uses its software to process such data and assess the accuracy of AI.

Some investors think ClickHouse’s data will be in more demand as developers turn to AI agents, which automate complex tasks using customers’ web browsers or enterprise apps, such as automatically filling out expense reports and entering them in accounting software.

While ClickHouse’s core software is open source, the company charges businesses for a managed cloud service, with pricing based on enterprise features and how much compute and storage the customer uses. At the end of its first quarter, ClickHouse was generating roughly $70 million in annual recurring revenue, which typically refers to subscriptions over the next 12 months, according to the same person.

Even if revenue has grown since then, the new valuation would give ClickHouse a valuation multiple on forward revenue that’s significantly higher than those of its rivals.

It’s going after customers served by larger companies, such as publicly traded Snowflake, which generated $3.6 billion in revenue for its most recent fiscal year. Snowflake’s database software processes different types of information, from photos, emails and audio files—key for running generative AI models—to structured data like numbers and text, as well as event data.

“ClickHouse is a step forward because it does real-time analytics better than Snowflake,” said Renee Shah, an enterprise angel investor and former partner at Amplify Partners, who did not back either company.

While some customers want the “bells and whistles” Snowflake provides, ClickHouse is faster and often cheaper, and it focuses on real-time analytics, she said.

A Snowflake spokesperson declined to comment.

ClickHouse is also competing with Elastic and Datadog, which like ClickHouse focus on real-time event analytics.

Alexey Milovidov first began working on an early version of ClickHouse in 2009 when he was still employed at Yandex, a Russian counterpart to Google. Yandex launched ClickHouse in 2012 to power Yandex Metrica, a popular web analytics tool, and released it as an open-source project in 2016.

Yandex then spun out ClickHouse as a stand-alone Delaware-incorporated company in September 2021, announcing a $50 million Series A round led by Index Ventures. Later that year the company announced Coatue Management and Altimeter Capital led a $250 million Series B at a $2 billion valuation. The startup has headquarters in Redwood City, Calif., and in Amsterdam.

Milovidov became ClickHouse’s co-founder and chief technology officer, while Aaron Katz, previously chief revenue officer at Elastic and a sales executive at Salesforce, became CEO and co-founder. They founded the company with now-president Yury Izrailevsky, a former engineering vice president at Google and Netflix.

ClickHouse, in a blog post condemning the Russian invasion of Ukraine posted three years ago, said it has no Russian operations, investors or board members.