Snowflake IPO Targets $24B Valuation With Unusual Berkshire Backing
Cloud data warehouse Snowflake sets an initial IPO price range of $75 to $85 per share, aiming for a valuation up to $23.7 billion. Notably, both Salesforce and Warren Buffett's Berkshire Hathaway commit to major private placements ahead of the public debut.
Snowflake sets an initial IPO price range of $75 to $85 per share, targeting a valuation between $20.9 billion and $23.7 billion. This massive figure represents a significant jump from the $12.5 billion private valuation the cloud data company achieved earlier this year during its Series G round. The offering potentially raises over $2.7 billion for the fast-growing startup.
Built into this public debut are two concurrent private placements worth $250 million each from Salesforce Ventures and Berkshire Hathaway. While Salesforce's participation aligns with its typical enterprise cloud investments, Berkshire Hathaway's involvement surprises market watchers due to the legendary investor's traditional avoidance of unprofitable tech companies. Berkshire also agrees to purchase over four million additional shares in a secondary transaction, bringing its total potential investment beyond $500 million.
Snowflake attracts these heavyweight investors through a compelling financial narrative of epic revenue growth, improving gross margins, and dramatically curtailed losses. This combination of rapid scaling and improving unit economics proves durable enough to tempt Warren Buffett, making Snowflake one of the most highly anticipated enterprise tech offerings of the year.