SQL stands for Structured Query Language and it has been the gold standard used to communicate with databases since it was pioneered at IBM in the 1970s. Materialize, a streaming SQL database company, allows businesses to take the already known SQL commands and apply them directly to datasets in real-time, instead of querying databases. Unlocking insights straight from data results in fewer steps, making the data more valuable as there are no lags and results are provided continuously instead of a single point in time as with traditional querying. Materialize is best suited for instances when the same query is repeatedly asked as found in dashboards, reports, automation, and most application code across any setting or industry. The company’s developer community is nearing 1000 members and employee count has grown 63% in the last six months as the company prepares to move into its new headquarters at the old Slack New York offices.
AlleyWatch caught up with Materialize CEO and Cofounder Arjun Narayan to learn more about how the company is making streaming data accessible without specialized knowledge, future strategic plans, latest round of funding, and much, much more.
Who were your investors and how much did you raise?
We have raised over $100M to date. This latest round, a Series C, is a $60M equity round led by Redpoint Ventures. We are excited to be working with Redpoint Ventures in this latest round as they have a good portfolio of data company success stories, including Snowflake, Cockroach Labs, and Looker, and outside of the data space, Heroku, Twilio, Stripe and Hashicorp.
Our other investors include Kleiner Perkins, Lightspeed Venture Partners, among others.
Tell us about the product or service that Materialize offers.
Materialize helps businesses easily build with streaming data using standard SQL. We’ve seen our early customers use Materialize for real-time data visualization, financial modeling, and to advance various SaaS applications in martech, logistics, and enterprise resource planning. Some sample scenarios are:
- Financial institutions can accurately identify fraudulent transactions instantly, minimizing false positives and greatly reducing the cost of remediation.
- Retailers and eCommerce sites can provide better personalization and recommendation services in a host of ways – real-time recommendations, faster cart abandonment notifications, or just-in-time supply chain management.
- Companies of all sizes can establish real-time dashboards for all operational metrics – viewing performance in real-time instead of waiting for overnight refreshes.
We just announced Materialize Cloud, which offers the first standard SQL interface for streaming data. Materialize Cloud makes it simple for any business to understand streaming data, answer complex questions and build intelligent applications without needing specialized skills.
Traditionally, making use of streaming data has required heavy investments in engineering resources that have made the move to real-time infrastructure off-limits for many organizations. Materialize Cloud now makes it easy for companies of any size to incorporate streaming data into their applications. Unlike competing products that require customers to learn new languages, Materialize Cloud is based on industry-standard SQL, and is easy to set up, scale, and begin using “out of the box.”
Frank McSherry and I founded Materialize in February 2019 after realizing the implications of Frank’s Timely and Differential Dataflow research in providing ‘true’ real-time data streaming. Frank, in particular, spent years doing the hard science that allows developers to write complex queries for streaming data using standard SQL.
Every business needs to be a real-time business, but that future is limited by current approaches that require compromises between cost, speed, and features. For example, you can’t get millisecond response times for complex queries without the time and expense of building custom microservices. We have the mentality that all businesses should have access to the power of accurate streaming data without tradeoffs. Although other data streaming solutions have been around for years, each one of them requires some sort of compromise.
We are aiming to solve a tough problem, but our team includes engineers who were early employees of Cockroach Labs, Dropbox, PayPal, and YouTube. We each have experience working on really tough problems in the past.
In databases, materializing views refers to the act of pre-computing the results for a query, so that it is instantly available when needed, rather than doing the work only when it is asked for (and waiting for the computation to finish). Materialized views that are always fresh have long been prohibitively expensive in traditional database systems, and Materialize makes them cheap and always ready on all your streaming data.
How is Materialize different?
There are four key things that set us apart from other companies that play in this space:
- We are purpose-built for streaming – Data products can’t be perfect for every use case. For Materialize, the main motivation behind the product is streaming data. Our team has been studying this topic for decades and we are especially proficient at providing streaming services to our customers.
- Standard SQL – No need to set up a complex pipeline or learn a new and/or complex technology.
- We integrate with the Postgres ecosystem and toolset – We play nicely with various sources of data including event stream processors, CDC, data lakes, and Postgres databases. We also offer out-of-the-box support for dbt, opening the door for analysts to become first-class creators and users of streaming analytics.
- We have decades of academic research behind the underlying systems – Timely Dataflow and Differential Dataflow.
What market does Materialize target and how big is it?
Materialize is looking to help developers working with real-time data. What’s been fascinating to observe over the past couple of years is the rapid rise of real-time data. Streaming sources are predicted to generate more than 25% of all data within the next few years. Our ability to help simplify how developers work with real-time data presents a pretty massive market opportunity.
What’s your business model?
Materialize Cloud is free to try for a set amount of time, and there is a source-available version of our product that can be deployed locally. We’ve built an active community of Materialize users with our free versions, and we look to prioritize user experience over everything else. We charge for ongoing access to our cloud product and flexibly scale our pricing based on usage.
What are your post-COVID office plans?
We have grown headcount this year by 63%, attracting talent from companies like DigitalOcean, Facebook, and Google. We are excited to be taking over Slack’s old office space in New York City and have been following best practices to keep everyone safe – including broad support for ongoing remote work. We look forward to opening up the office when it is safe to do so.
What was the funding process like?
We strategically tapped investors that were close to Materialize and understand the problem we are looking to solve. We were not in any dire need to raise capital, which allowed us to be rather selective with our investors and specifically select individuals who are intimately familiar with our market challenge and target segments.
What are the biggest challenges that you faced while raising capital?
As with any big challenge for a company of our size, our number one most limited resource is time. Raising capital took time away from doing what we love to do, which is building Materialize, growing our team, and working with our customers. Thankfully, our investors have been extremely helpful sources of guidance and insight as the company has grown.
What factors about your business led your investors to write the check?
We’re building for the long term, not just focusing on near-term goals. The problem that we’re solving isn’t new – but we feel that we’re the first team to deliver a product that delivers real-time computation without sacrificing capabilities or costs. The timeline of our funding right after our previous Series B is round is also indicative of the market for Materialize’s services.
What are the milestones you plan to achieve in the next six months?
We intend to use the new funds to further grow our engineering team and bring Materialize Cloud, which we announced last week, from public beta to general availability.
Where do you see the company going now over the near term?
We intend to use the new funds to further grow our team and bring Materialize Cloud, which we announced last week, from public beta to general availability.
What’s your favorite outdoor dining restaurant in NYC?
Not a restaurant per se, but the local post-work stop for the team was right on Mulberry Street, a small bar appropriately called Grotta Local.