Venture capital firm Accel Partners is doubling down on its big data investments, announcing on Monday evening that it’s launching its second $100 million fund dedicated to analytic software and applications. The aptly named Big Data Fund 2 follows on the firm’s initial Big Data Fund that it announced in November 2011.
Since then, Accel has put a name on the types of companies it’s seeking to fund with the new allocation — namely, those selling what it calls “data-driven software.” That’s a fancy way of saying that it’s not looking to fund infrastructure-level software such as Hadoop or NoSQL databases, but rather software that leverages these technologies and others in order to make analytics simpler. It wants to fund startups targeting business users rather than data scientists.
This type of company isn’t too difficult to come by anymore. Just about everywhere you look, someone is trying to put a big data spin on an old problem or invent some new methods for doing business intelligence. Accel has recently funded a number of them including RelateIQ, Opower, Sumo Logic and Causata. Among the non-Accel-funded startups GigaOM has covered in just the past few months are Ayasdi, Wise.io, Spinnakr, Statwing and BloomReach.
All this interest in data-driven software is no doubt inspired by the proven utility and wildly successful initial public offerings by enterprise data software companies such as Splunk and Tableau. Entrepreneurs can see the value in rethinking legacy business software or processes for the era of big data and cloud computing, and investors have dollar signs in their eyes as they try to get a piece of the most-promising companies.
As with all trends, much of this startup and investing activity will prove to be overkill, but there’s no denying the promise that the right products have for everyone involved. Businesses really are hurting for better ways to make sense of all the data they’re generating and being exposed to, and they’ll pay handsomely to software vendors that can solve the problem.