If you have been investing in artificial intelligence (AI) over the past year, then you've likely heard of the AI neocloud company Nebius Group (NBIS 4.43%), which split off from the Russian search giant Yandex and began trading on the Nasdaq Stock Exchange last October. The stock has been a moonshot and is up over 618% in the past year, due to insatiable demand for cloud computing capacity.
But aside from the company's core AI cloud business, Nebius also owns other AI-related businesses like its autonomous vehicle division Avride and has also acquired some large equity stakes in other AI businesses. Specifically, the company owns a 28% stake in one of the hottest AI startups that is reportedly gearing up for an initial public offering.
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Another big AI play
The company I am referring to is called ClickHouse, and Nebius acquired its stake in the company in 2021, according to filings. ClickHouse is an AI data company with a range of capabilities, including real-time analytics, machine learning, and generative AI, and data warehousing, among others. Companies can use these capabilities for risk modeling, fraud detection, and sentiment analysis. ClickHouse excels in being able to store and quickly sift and search through massive amounts of data, which gives it many use cases.
In fact, thousands of high-profile customers are already using ClickHouse in their daily operations. For instance, the grocery delivery company Instacart uses ClickHouse as its real-time data store to enable fraud decisions in fractions of a second. Instacart also uses ClickHouse for other functions, including its critical retailer and ads dashboards, A/B testing to compare how two versions of similar content might perform, and machine learning signals.
In a recent interview, ClickHouse's CEO, Aaron Katz, said there are only a handful of tech companies that can meet the back-end needs of companies with thousands of simultaneous users constantly running hundreds of thousands of queries over an enormous data set. "So, it needs to be able to store that data very efficient and in a cost-effective way. And then it needs to be able to provide lightning-fast query experiences, so sub-second latency over both petabytes of historical data and data that's streaming in," Katz said.
In May, ClickHouse raised a $350 million series C round, which valued the company at $6.35 billion, according to Bloomberg. Recently, the company extended this round to new investors, including Citi Ventures, Insight Partners, D.E. Shaw Ventures, and individual investors from the San Francisco 49ers, including Brock Purdy, Christian McCaffrey, and Kyle Juszczyk.
In a recent announcement about extending the series C round, ClickHouse also said it had surpassed 2,000 customers and more than quadrupled annual recurring revenue over the past year. New customers include Hewlett Packard, Cyera, and ShopMonkey, while long-time customers include Canva, Harvey, LangChain, Perion, and SonyLIV. The company is also seeing strong adoption from popular AI companies like Anthropic and Meta Platforms.
An IPO seems likely
While ClickHouse has yet to file a registration statement or do anything officially announcing an IPO, Katz made it very clear that the company is interested in going public. While many companies prefer to stay private longer, Katz said he's more traditional and believes that companies should go public when their technology achieves a certain scale and unit economics. "And so, that's the objective here," he added.
Now, it makes a certain amount of sense that Katz would want to go public. He acknowledged that he's biased because he's had great experiences taking companies public, like when he was an officer at Elastic and at Salesforce before that, when he was a "mid-level manager." The market also feels ripe for IPOs after years of dulled activity, especially for AI IPOs, which investors have gobbled up this year.
With some investors concerned about a bubble, this may be the time to go public while conditions are still favorable. Given the reception to AI IPOs and the company's ties to Nebius, although I haven't seen the company's financials yet, I would expect ClickHouse to be quite popular with investors, which would in turn benefit Nebius by making the company's stake in ClickHouse more valuable.
