“What we’re seeing here is a real opportunity to build companies up and down the data stack,” says Ping Li (pictured), one of several Accel partners participating in the Big Data Fund initiative. “We think there is a real opportunity to back the next generation of billion-dollar software companies.”
There is increasing interest in the space. peHUB reported late last month that New York’s IA Ventures is nearing a close on $110 million for a second fund dedicated to Big Data investments.
Research firm Gartner recently identified Big Data as one of 10 “strategic technologies” for 2012. “The size, complexity of formats and speed of delivery exceeds the capabilities of traditional data management technologies,” Gartner stated. “It requires the use of new or exotic technologies simply to manage the volume alone. Many new technologies are emerging, with the potential to be disruptive.”
Li says that traditional databases are “good for structured data — things that fit nicely into rows and columns, but a lot of Web data doesn’t fit nicely into rows and columns. For example, Web logs [blogs] and photos are unstructured data.”
Accel has long had an interest in Big Data. It was an early investor in Facebook, perhaps the Web’s biggest producer of unstructured data. Accel is also a backer of Fusion-io (NYSE: FIO), which makes hardware and software to speed up the processing power of data centers, and Cloudera, which makes a commercial version of Apache Hadoop, open-source data management software that works with petabytes of data. (Cloudera’s Chief Scientist is Jeff Hammerbacher, who built Facebook’s data team and led the creation of Hadoop-based applications at the social network.)
Besides the Big Data Fund, Accel is assembling a team of Big Data advisors and in the spring will host a Big Data conference to bring together data scientists, entrepreneurs and others to network and discuss trends.
Asked if Accel has any plans to do a dedicated fund targeting Big Data companies, Li says: “I don’t think that’s the plan right now. This is more to highlight an area of deep activity rather than create a separate fund.”
Accel won’t have any trouble finding capital for the Big Data Fund initiative. In the past year alone it has raised more than $2.6 billion in fresh capital. Accel’s funds include Accel XI, a $475 million U.S.-based early stage fund raised this year; Accel Growth Fund II, a $875 million U.S.-based growth fund raised this year; Accel London III, a $525 million early stage fund raised in 2008; IDG-Accel China Growth Fund III, a $550 million China-based early stage fund raised this year with IDG Capital Partners; and China Capital Fund II, a $750 million China-based fund that it raised with IDG this year to focus on pre-IPO investments. Accel is also in the midst of raising a second early stage India fund, which has a target of $150 million.
In addition to Li, other partners involved in the Big Data Fund include Andrew Braccia, Kevin Efrusy and Richard Wong in the United States, Subrata Mitra in India and Bruce Golden in London.
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