On September 16, 2020, a Snowflake banner was posted on the New York Stock Exchange to mark the company’s initial public offering.
Brendan McDiarmid | Reuters
is buried on page 280 of Instacart IPO filing Last week, there was an article that caused a stir between two companies that had nothing to do with grocery delivery.
One of Instacart’s board members is Instacart’s CEO, Frank Slootman. snowflakeis a publicly traded company that helps enterprises store and manage large workloads in the cloud.slot man I participated He will join Instacart’s board of directors in 2021 and the relationship will require the company to disclose its business relationship with Snowflake.
At first glance, Instacart’s spending looks daunting for Snowflake.
Instacart said it “paid Snowflake” $13 million in 2020 for its “cloud-based data warehouse service,” $28 million in 2021 and $51 million in 2022. said to have increased to The numbers for 2023 appear to point to a reversal, with Instacart saying it “expects to pay Snowflake about $15 million” for the full year.
This translates to a horrifying 71% decrease in payouts.
But Snowflake later said those numbers didn’t tell the truth, a fact largely backed up by footnotes deeper into the prospectus.
Meanwhile, confusion ensued.
Employees at Snowflake rival Databricks pounced. On social media, they highlighted a clear decline in spending on Snowflake, suggesting it was a result of Instacart migrating workloads to Databricks infrastructure.
Snowflake staff hit back by claiming the numbers were taken out of context, accusing Databricks of consistently developing a narrative of taking business away from Snowflake.
Many of the posts on Reddit, LinkedIn and X (the site formerly known as Twitter) have since been deleted.
Instacart was doing its own takedowns.
The company published a blog post in May titled “How Instacart Ads Uses Lakehouse Architecture and Spark to Modularize Data Pipelines.”of postdescribed the software behind Instacart’s advertising infrastructure, and included a discussion of Databricks’ move to Lakehouse technology and the associated cost savings.
However, the blog was deleted as questions began to swirl after the IPO filing. Readers looking for posts should page withDatabricks also removed a case study detailing Instacart’s use of its technology, although the information is still available on the company’s website. presentation from earlier this year.
Representatives for Instacart, Snowflake and Databricks declined to comment.
The dispute came to light simply because Slootman is on Instacart’s board of directors, but between the two companies battling in one of the hottest areas of technology where cloud, data and artificial intelligence collide. fanned the flames of fierce competition. The dispute has appeared on social media many times in the past, reddit A user wrote a post a few months ago titled “Databricks and Snowflake: Stop Fighting Socially”. A commenter responded, “Is this data engineering pro wrestling?”
FALMUTH, MA – APRIL 8: Instacart shopper Loralyn Geghat makes a delivery to a customer’s home during the COVID-19 pandemic on April 7, 2020 in Falmouth, Massachusetts. Some Amazon, Instacart, and other workers have staged protests demanding better wages, hazard pay, sick pay, and more. time. (Photo credit: David L. Ryan/The Boston Globe, Getty Images)
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Snowflake went public in 2020, raising over $3 billion in the largest IPO in U.S. history for a business software company. Even after last year’s market crash, Snowflake’s market cap is over $50 billion.
Databricks is still privately held, but is one of the most highly valued venture-backed companies. Private investors value the company at $38 billion in 2021. reported by Bloomberg The company announced last week that it was in talks to raise funding at a valuation of $43 billion.
Recently, Snowflake also entered the AI field acquired AI search engine Neeva invested $185 million, while Databricks invested $1.3 billion in generative AI startup MosaicML.
What is the true story of Instacart?
Now go back to Instacart.
Databricks took over the business from the grocery delivery company, but Instacart’s S-1 footnote describing its relationship with Snowflake shows that the 2023 spending decline isn’t the most relevant number.
Rather, how Instacart accounts for operating costs (the actual usage of Snowflake) is $28 million in 2021, $28 million in 2022, and $11 million in the first half of 2023. was a dollar. That’s still down this year, but when you convert it to an annualized rate, it’s about 21% instead of 71%.
To add to the confusion, the “related party transactions” footnote does not name Slootman or Snowflake, only referring to “executive officers of software vendors.”
In the midst of online chatter, Snowflake wanted to clarify the situation, at least from that perspective. On Wednesday, the company released the following document: 4 paragraph blog post The title is “Snowflake and Instacart: The Facts.”
“Over the past few days, the extent and trajectory of Instacart’s use of Snowflake has been misrepresented by some on social media,” the post begins. Nowhere in this post does he mention Databricks, a consistent theme for Snowflake, and in his financial documents he does not list Databricks as a competitor.
Snowflake went on to say that it is working with Instacart to “optimize efficiency,” a term that means doing more with less, and that its technology is being used by “catalog teams, machine learning, Advertisers, Shoppers, Retailers, Customers, Logistics Organizations.”
The post further highlighted the usage figures found in the footnotes of the application, saying, “Some social media posts incorrectly confused payment schedules with actual usage, suggesting a significant reduction in spending. But this is not true,” he said.
In other words, if your spending is down, it’s not because you’re losing business to obscure companies.
The good news for Snowflake is that the IPO process requires multiple prospectus updates. Instacart, which is about to open up the tech IPO market that has been mostly frozen for 20 months, will soon have an opportunity to settle the matter with investors.
— CNBC’s Jonathan Vanian and Jordan Novet contributed to this report.
clock: Instacart file for IPO on Nasdaq “CART”
