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DataStax Raises $106 Million to Challenge Oracle in Databases

Sept. 4 (Bloomberg) -- DataStax Inc., a database-technology startup that’s seeking to challenge Oracle Corp., raised $106 million in a new financing round that values the company at more than $830 million.

The funding was led by venture capital firm Kleiner Perkins Caufield & Byers and includes other new investors like ClearBridge Investments and Cross Creek Advisors. Existing investors such as Lightspeed Venture Partners and Scale Venture Partners also participated. The money brings the Santa Clara, California-based company’s total funding raised to $190 million.

DataStax declined to address whether it plans to go public after the new funding. In a statement, Chief Customer Officer Matt Pfeil said that an initial public offering is a “special type of fundraising that will help us gain even more global credibility when the time is right.”

DataStax, founded in 2010, is part of a new breed of database startup that uses open-source technology designed to work on low-cost hardware. Other companies that provide similar offerings include MongoDB Inc., which was valued at more than $1 billion in a financing last year. The startups contrast with database incumbents like Oracle, which typically tie their products to higher-cost machines.

DataStax’s open-source database management system is called Cassandra, which was developed at Facebook Inc. and released as an open-source project in July 2008. Its technology is inspired by Amazon.com Inc.’s proprietary Dynamo database, which helped lower the cost and increase the reliability of systems that powered the e-commerce company’s shopping-cart features. A Dynamo engineer, Avinash Lakshman, went to Facebook and helped build Cassandra.

Structuring Data

“Traditional database players like Oracle tie their architecture to high-end storage devices,” Pfeil said in an interview. “Those fly in the face of economics, and to really capture the power of big data, you have to look at newer technology. I’m willing to bet that roughly 80 percent of our opportunities are Oracle replacement.”

Deborah Hellinger, a spokeswoman for Oracle, declined to comment.

Cassandra gets some of its performance advantages by storing and structuring data differently to the main systems developed by Oracle, Microsoft Corp. and others. That has caused some user confusion, as it forces information-technology professionals to interact with Cassandra-held data differently than that kept in traditional databases.

DataStax said it has more than 350 employees. The company plans to use some of the funding to expand its sales and marketing teams, as well as hire more engineers.

“We’ll hire a really talented smart engineer anywhere on the planet,” Pfeil said.

To contact the reporter on this story: Jack Clark in San Francisco at jclark185@bloomberg.net

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net Ben Livesey

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