Data: the future of business

Data: the future of business

The founding team of Collibra convinced us that data was the future of business. They were right - Collibra became an essential supplier of data governance tools and the first Belgian unicorn.

According to an ancient Greek saying, “a fox knows many things, but the hedgehog knows one big thing.” In the world of venture capital, we’re used to fox-like founders: busy brains with an idea a minute. Not so with Felix Van de Maele, one of the founders of Collibra. He describes himself as having one great idea that shaped his career: the thesis that every desk in the office needs to have a powerful tool for data governance. Out of this idea, Collibra was born.

The key insight was that data wasn’t some isolated issue for the IT department, but a fundamental business topic affecting most desks in the office. This insight seems obvious with the benefit of hindsight, but at the time this view was not widely shared, even among other venture capital firms. Finding not enough support in their native Belgium, the Collibra team found us through a venture matchmaking agency. We were deeply impressed with the drive of the team, and we quickly shared their vision. Above all, we grasped the potential size of the idea and the vast total addressable market - but to get there, the company needed a strong early round to get off the ground. This led to a hair-raising moment for us when we made the largest commitment to date to an unproven company, based on a thesis that was gaining little traction in the market.

Every business is a data business

The founders soon found their thesis validated by demand from the market. The first wave of customers came from the financial services sector. Operatives in banks quickly grasped the utility of the tool and became early adopters of the technology. We knew we were on to something big as soon as the size of the contracts changed. When the first seven-figure contracts were signed with major banks, we knew we were on to something big with Collibra.

In the late 2010s, the narrative changed. In the broader business world, data became the next big thing, and a new mantra started making the rounds: “every business is a data business.” Collibra, having known this for a while, was in a great position to capture a chunk of this emerging market. Then, all of a sudden, the momentum was there. Customers from other sectors followed the early adopters, and Collibra entered the business mainstream, driving revenue growth and company expansion. With the momentum came the attention of the big players in venture capital; large, established funds were eager to get on board. Collibra raised several rounds with the backing of IQONIC, Battery Ventures, Sequoia, CapitalG and Tiger Global. After over ten years in business, Collibra reached unicorn status in early 2019 after raising a Series E round.

Seizing this moment was key, as was doing so in the right way. In venture capital, there’s always the danger of mismanaging a sudden surge. Selling off too much too early or bringing the wrong funds on board can be just as damaging for a company as stalling out. This is why we insist on investing on a company-first basis. At any juncture, we ask the question: what’s the best thing to do in the interest of the company? We contrast that with another approach we often see in the market, namely that funds tend to lean toward decisions that are best for the involved funds, which, in our view, often leads to worse outcomes. We prefer to partner with founders who share this perspective and commit to the long-term success of the company. In this case, the team managed the process with great skill.

Great founders know when to adapt

Our investment in Collibra was a big commitment and certainly not a sure shot, but we firmly believe that this is the only way to do venture capital and generate excellent fund return multiples; with bold bets placed with confidence in the team and the mission in the face of great uncertainty.

Another important learning along the way for us was that truly great founders are adaptive and keep reinventing the company to suit the circumstances. We saw this with Felix Van der Maele and Stijn Christiaens: the founders started with a big vision but knew when to pivot to the relatively niche financial services market to find its first customers and build revenue and traction. When the path opened to wider adoption, they managed to seize the opportunity and attract the right funding to support that growth. In a way Collibra experienced that wonderful moment when a startup suddenly takes off - passing the inflection point on the S-curve of growth, in VC-parlance - multiple times each time it updated and extended the range services and found a new audience.

Now, the next big challenge is here: in the AI era, managing and refining data has become exponentially more important. As models are only as good as the quality of the data they are trained on, data governance is critical. We’re already seeing the effects of this trend on the adoption of data governance solutions to improve the output quality of AI in the stack. What’s more, Collibra is also a powerful tool for managing AI-related risks. All is set for Collibra to make another incredible ride on the S-curve in this new era.