In recent years venture capital firm have generally shunned enterprise software companies, so it was interesting to see start-up expressor (no, this is not a typo) doing a USD 10 million round this week. The company has genuinely interesting data integration technology, and in a future release plans to add significant data quality functionality. Its use of parallelism enables it, in principle, to compete at the high end of ETL.
It is good to see venture firms dipping their toes back in the water of innovative enterprise software companies. A couple of years ago I came across what I thought was an interesting data quality company called Zoomix. I introduced them to a prestigious venture firm, who were entirely uninterested, at the time chasing after ever more trendy social networking websites (the company was in fact bought by Microsoft a few months ago, which would have netted a pretty decent return for the investors). Although the enterprise software sector is not exactly booming, there is still room for astute investments in differentiated technologies.
Increasingly when I talk to customers about their plans for master data management or data quality, the area of data governance comes up. Data governance is the set of business processes and controls that surround the lifecycle of data, rather than necessarily involving technology. Some MDM vendors provide sophisticated support for data governance, others less so, but I believe that it is key to the success of a data initiative. Without thinking about the processes, it is of limited use to just put in a piece of technology, or carry out a once-off data cleansing exercise without considering what happens next.
Indeed in talking recently with data quality vendors, a number have commented on how the increasing profile that data governance is getting has enabled them to, in turn, get a higher profile. Previously data quality was seen by many companies as strictly something for IT or those direct mail geeks in their marketing department, but now data quality is getting an airing as part of broader initiatives to improve data across the board.
In order to put more flesh on the data governance bone, The Information Difference is conducting a major piece of primary market research into data governance. You can be part of this by taking the survey Completed surveys will receive a full copy of the research, and there is even a prize draw with exciting and valuable prizes (this view may depend a little on your taste) to tempt you.
There is an extremely interesting entry in a blog called a “A VC”, written by Fred Wilson, managing partner of a small venture capital firm called Union Square partners. It has a particularly clear description and example of the financial mechanics of the venture business, which any software start-up entrepreneur should understand thoroughly before they raise money. The blog is worth reading, though Mr Wilson has an eccentric style which includes his views on popular music interspersed with his venture capital experiences.
For a more in-depth view I strongly recommend the book Smarter Ventures by ex-journalist Katherine Campbell, now herself in the private equity business.