Confluent, the commercial company built on top of the open source Apache Kafka streaming database project, announced today that it has closed a $50 million investment.
The round was led by Sequoia with Benchmark and Index Ventures also participating. Sequoia’s Matt Miller will be joining the Confluent board as part of the deal. Today’s round brings the total investment into the company to $80 million.
At its core, Kafka is simply a messaging system, created originally at LinkedIn, that’s been designed from the ground up to move massive amounts of data smoothly around the enterprise from application to application, system to system or on-prem to cloud — and deal with extremely high message volume.
Confluent CEO Jay Kreps said the LinkedIn team built Kafka to treat all data across the enterprise, wherever it lived, as a real-time stream of data and to allow anything to tap into and react to it. “It could process a trillion messages every day in real time and we released it as open source and it spread in Silicon Valley, and a number of the biggest tech companies are built around Kafka,” Kreps told TechCrunch.
Organizations using Kafka as a core part of their internal systems include Netflix, Uber, Cisco and Goldman Sachs. Matt Miller from lead investor Sequoia said his company talked to people using the open source product, and he was convinced that there will be a huge market for Confluent. “Our view is that Confluent has the potential to be one of the most impactful tech companies of the next decade,” he said.
While the community edition is available for free, many companies are still willing to pay Confluent for its auxiliary tools that make Kafka easier to use. These include the ability to manage and monitor data flows in a complex organization, for example, or to trace data flows across an organization and to optimize and balance data running on Kafka clusters more efficiently. In addition, Confluence offers customers various support plans.
While it was possible to connect these systems before Kafka, Miller says it was much less efficient and much more costly. “Most enterprises have used ad hoc integrations or batch processing that takes a lot of time. Kafka makes it a lot less expensive to share large amounts of information and to wean off of [older systems] and move to micro services,” he explained.
Kafka is particularly well suited to Internet of Things because of its ability to deal with large amounts of data and communicate quickly across various systems that need access to that data. Internet of Things devices are expected to generate massive volumes of data in the coming years and businesses will need a way to access this data and move it around the enterprise to make use of it.
As for what he intends to do with that $50 million, Kreps says he plans to continue building the company in a fast-growing market. “If you are at the head of a pack of a fast moving area, you want to stay ahead. You want to make the tech to define this category and take it to market all over the world,” he said.
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