- The creators of the open source data tool ClickHouse have raised $50 million to form a company.
- ClickHouse was created 10 years ago and is already used by firms like Uber, eBay, and CloudFlare.
- The new company plans to sell subscriptions to a cloud-managed version of the open source tool.
Open source software is so popular in large part because it's free. But in recent years, some open source software has also emerged as a cash cow for their creators and investors — Elastic, Confluent, and Databricks all built massive businesses on top of open source projects.
Now, the creators of ClickHouse — a widely-used open source data warehouse — are forming a company of the same name based on the technology, and their business is launching this week with a $50 million Series A funding round led by Index Ventures and Benchmark.
Alexey Milovidov first developed ClickHouse more than a decade ago as an employee of the Russian IT giant Yandex. The tool was open-sourced in 2016 and gained widespread use by enterprise firms — companies including Uber, eBay, CloudFlare, and Cisco use ClickHouse to process huge datasets.
After hearing portfolio companies gush about ClickHouse, Index Ventures cofounder Mike Volpi reached out to Milovidov last year and proposed a plan to form a company around the tool.
"It kept popping up. So we were like, okay, why don't we take a look at this ClickHouse thing and see if we can build a business around it?" Volpi said in a interview with Insider. "That's when we had the spark."
Volpi learned that most of the engineers who built ClickHouse were still working for Milovidov at Yandex. They hatched a plan to purchase the rights to ClickHouse from Yandex and move a chunk of the team to a new headquarters in Amsterdam.
At the same time, Aaron Katz, a former Elastic and Salesforce executive, was speaking to Yandex about engineering a spinout. Because they had worked together in the past, Volpi and Katz joined forces — Katz would serve as ClickHouse's CEO, while ex-Google engineering VP Yury Izrailevsky joined as ClickHouse's president overseeing product.
ClickHouse now plans to build out subscription-based services on top of its open source product, Katz told Insider. The primary driver of revenue will be a cloud-managed version of ClickHouse, which customers can pay to run on the startup's servers rather than their own.
The company will compete with other data warehouse tools like Databricks, Splunk, or Druid. But Katz said ClickHouse stands apart from competitors because of its speed — while most open source data tools are written in Java, ClickHouse is written in C++, enabling it to process large swaths of data more rapidly.
"Where ClickHouse shines is the ability to ingest in store petabytes of data extremely efficiently, and query that data for a variety of analytics use cases and get the results of those queries in milliseconds," Katz said. "It's extremely popular for people that need to analyze extremely large datasets with extreme performance."
The $50 million Series A was also joined by Yandex N.V., the company's venture arm, as a minority investor. Katz said the infusion of cash will go towards hiring engineers to build out ClickHouse's cloud product. He added that VCs were eager to invest when they heard ClickHouse's pitch.
"They didn't need selling on the product," he said. "There's tremendous investor interests in participating in this round in subsequent rounds, which is a great validation of the technology and of the team that we've assembled."
