Cloud database company Snowflake opened trading on Wednesday at more than double its list price, making CEO Frank Slootman, ex-CEO Bob Muglia and cofounder Benoit Dageville billionaires.
As public-market investors clamor for shares of cloud computing standout Snowflake, the company’s outsize first-day stock performance has created several billionaires from its current and former executives.
Shares of Snowflake opened at $245 on Wednesday, more than double the California-based company’s list price of $120. After several hours’ delay, as bankers sought a price at which the company would have enough sellers to open, trading was halted briefly at $276, moments after it opened. Shares were trading at $258.42 as of 1 p.m. EDT on Wednesday, giving Snowflake a market capitalization of nearly $71 billion.
Founded in San Mateo, California, in 2012 by Benoit Dageville, Thierry Cruanes and Marcin Zukowski, Snowflake had previously raised money from private investors in February 2020 at a valuation of $12.4 billion. The company, which offers a virtual data lake, or an easily searchable software layer between cloud providers like Amazon, Google and Microsoft and customers’ own programs and apps, generated such buzz by reporting revenue of $264.7 million for the fiscal year ending January 31 and of $242 million for the six months ending July 31, up 174% and 133%, respectively, while posting industry-leading net revenue retention of 158%.
Update: “This is a very heavily vetted company,” Slootman told Forbes an interview on Wednesday afternoon. “The only problem today was that nobody wanted to be a seller because the conviction was so high.”
As CEO and chairman, Slootman stood to win big in the IPO, though a majority of his stake in Snowflake includes unvested options, as detailed in its S-1 prospectus. Called out of a retirement spent in elite sailboat racing, Slootman had previously taken two companies public: Data Domain and ServiceNow. His latest payday is set to dwarf both. Excluding unvested options, Slootman holds around 5.3 million shares of Snowflake, a stake worth $1.4 billion as of 1 p.m. EDT. That’s added to the estimated $394 million in (post-tax) share sales Slootman accumulated during his six-year stint as CEO and chairman of ServiceNow. With Snowflake’s first-day performance, Slootman now carries a net worth of $1.8 billion, with much more to come should he stick around long enough for his remaining options for millions of more shares to vest.
Asked about his billionaire status, Slootman said the title “means very little” as his decision to join Snowflake wasn’t motivated by money. The CEO insists he doesn’t “keep score” or compare himself to other tech leaders, but enjoys company-building above-all. “I crawled on the shore in this country, literally with 100 bucks in my pockets, and I’m not exaggerating when I say when I say that,” Slootman says. “I’m a huge bull on the opportunity in this country, I just can’t help it because I’ve lived that.”
The biggest individual winner in Snowflake’s IPO is cofounder Dageville, who remains at the company as its chief technology officer. Excluding unvested options, Dageville’s 3.5% stake means he owns 8 million shares of the company, a stake worth $2 billion at a share price of $258. Asked about Snowflake’s founders, Slootman called them “very, very humble people” who made his job easier joining later in the company’s story. “They’re immensely supportive for what’s going on. They may not be as hungry as they were before, but they are super motivated because they feel like this is Snowflake version two. And they are as motivated by that as I am. They have to build it; I have to sell it,” Slootman said.
And while Muglia had to abruptly make way for Slootman’s arrival as CEO in 2019, the ex-CEO of Snowflake, who helped take it out of stealth and raise its early venture capital funding rounds over nearly five years at the business, has also reached billionaire status due to his Snowflake shares. Muglia now owns a 1.7% stake in Snowflake after entering an agreement with Warren Buffett’s Berkshire Hathaway to sell half of his position at the $120 price per share of the IPO listing. Muglia made an estimated $340 million (post-tax) off that sale today, though the shares he sold have already more than doubled in value since. Add that to his remaining stake valued at $1 billion at a share price of $258, and Muglia’s net worth stands at $1.4 billion.
Of course, many more employees and investors are poised to cash in on huge payouts from Snowflake’s rapid appreciation on the New York Stock Exchange should it hold such value, or even close to it, when lockup periods expire later in the fall. With 49.5 million shares of Snowflake at IPO, Sutter Hill Ventures now sits on a position worth nearly $13 billion at the $258 share price. Others, including Altimeter Partners, ICONIQ, Redpoint Ventures, Sequoia and Dragoneer stand to profit in the multiple of billions.
This story has been updated to include comment from Snowflake CEO Frank Slootman.