When Anomalo’s co-founders departed from Instacart in 2018, they had one solution in mind – using machine learning to tackle the data accuracy issues prevalent in large datasets. Five years later, their idea has become even more crucial, as data quality takes center stage with the rise of massive language models.
Today, the startup announced a $33 million Series B, doubling their 2021 Series A and bringing the total raised to $72 million, according to the company.
Co-founder and CEO Elliot Shmukler confirms that the initial thesis has been validated over the years. He shares, “Whether it’s creating dashboards, making important decisions, or leveraging generative AI applications, having reliable data is crucial. Our tool ensures that the data is not only correct and of high quality but also ready to be used.”
With companies increasingly storing huge amounts of data in cloud storage and data warehouses such as Databricks and Snowflake, this need for accurate data has only intensified. However, Anomalo has found a way to ease the burden and reduce costs for their clients. They limit the data they monitor to specific sets, rather than monitoring everything. Shmukler explains, “We reserve our full machine learning and AI solutions for tables and data sets that truly need it.”
This strategy has proven effective, with the company experiencing 15x growth since their Series A round. Shmukler reveals that during the previous round, their revenue was around $1 million, which has now grown to approximately $15 million. In addition, their latest fiscal third-quarter results show an impressive 177% increase in annual recurring revenue, a remarkable achievement for a young enterprise startup.
While investors certainly appreciate rapid growth, Shmukler understands the importance of balancing growth and efficiency. He states, “Investors still want high growth, but they no longer want you to burn through your cash reserves.” As CEO, he is constantly finding ways to maintain this balance.
To achieve this, the company has set two primary goals – finding the equilibrium between growth and efficiency. Shmukler explains, “Our growth goal is based on the percentage increase in annual recurring revenue, while our efficiency goal is based on the burn multiple. This metric is emerging as one of the efficiency benchmarks that investors pay close attention to. We see the burn multiple as the counterbalance to our growth.”
As the company’s revenue continues to climb, they have ramped up hiring and now have a team of 50 employees. With this new influx of funds, they plan to double their workforce. In 2021, with a team of less than 10, Anomalo made diversity one of their core objectives. Shmukler admits that there is still progress to be made, but since their Series A round, they have hired seven executives, four of whom are women. Additionally, one-third of their engineering team is female, and Shmukler is actively working to close the gender gap further. He believes that having women in leadership roles will help attract more talented women to their company.
Shmukler shares, “Having women leaders and engineering managers has been instrumental in attracting female candidates for all positions. With our upcoming expansion, I believe this diversity will serve us well as we double our team.”
The impressive Series B investment of $33 million was led by SignalFire, with participation from strategic investor Databricks Ventures. Previous investors, including Norwest Venture Partners, Two Sigma Ventures, and Foundation Capital, also contributed to the round. It’s worth noting that Anomalo has caught the attention of one of the leading data analytics startups, Databricks, which was valued at $43 billion in September 2020 after raising an additional $500 million.
In conclusion, Anomalo’s innovative approach to data quality has proven to be a hit among investors, leading to impressive growth and significant funding. With their focus on both efficiency and growth, and a diverse team of talented individuals, the future looks bright for this promising startup.
