Snowflake was one of the most anticipated and successful IPOs of 2020, and the company’s launch and growth have attracted extreme excitement and interest from investors, including ones not normally associated with tech IPOs. Critics say this has gone way beyond any realistic expectations for Snowflake’s growth, but the stock has attracted the interest of some of the largest names in the finance and technology industries.

Snowflake was founded in 2012 by Oracle data engineers, Benoit Dageville and Thierry Cruanes. At that time, organizations would typically store their data using on-site servers. This was hugely expensive, tied organizations to legacy systems, and required constant maintenance. Instead of being accessible in one place, organizations relied on multiple data ‘silos’; for example, if sales and marketing data are held separately, it is not simple to search or access data stored in different places and in different formats.

Snowflake instead rents organizations space on its cloud, offering a centralized ‘data warehouse’ that eliminates the need for customers to buy and maintain expensive hardware. Users pay for the service by the processing time involved, with transparent pricing plans that allow the spend to increase as their users grow, rather than involving large jumps in cost. Snowflake also offers a single, simple interface for users to access their previously siloed data. This service has proved extremely popular. In 2020, Snowflake had around 3,110 customers, and in just under one year this number surged to 4,990, with more than 100 customers spending over $1 million per year.

Just prior to Snowflake’s 2020 IPO, Warren Buffett’s investment vehicle Berkshire Hathaway bought a large private stake in the company. The CRM giant Salesforce simultaneously bought an equivalent stake of $250 million. This contributed to a dramatic reception to the firm’s IPO, which launched on the New York Stock Exchange at $120 per share, well above analyst estimates. On the first day’s trading, the shares closed at $254, valuing Snowflake at $70 billion. As of 2021, Snowflake has a market capitalization of $117.9 billion. Its largest shareholders include ICONIQ Capital, a private investment management firm with major Silicon Valley executives as clients, and technology hedge fund Altimeter Capital.