Alibaba has spearheaded a Series B funding round in Israeli company SQream DB, marking its first major investment in the Middle Eastern nation. The round, totaling $26.4 million, also included Hanaco Venture Capital, Sistema and several others, as SQream eyes aggressive global expansion.
SQream DB, founded in 2010, is a database management system designed for Big Data analytics via SQL. It claims to be able to analyze 20 times more data up to a hundred times faster than competitors. The funding is part of Alibaba’s DAMO Academy, which is injecting $15bn into eight overseas R&D hubs – including one in Israel.
SQream is an attractive proposition for Alibaba’s cloud division, as it winds up for a fight against the market’s current giants. Alibaba Cloud’s annual revenue is currently around $2.2bn. While a 104% annual increase, the Hangzhou-based firm is still far behind leaders Amazon, Microsoft, IBM and Google.
For SQream Alibaba’s entry into its hierarchy helps expand into the Alibaba Cloud infrastructure. “The intimate relationship providesSQream with a streamlined entry into the large and growing Chinese customer base,” SQream CEO Ami Gal told Red Herring.
Gal added that the deal would allow his company to “build on the rapidly expanding feature set already available in SQream DB, and grow our sales, marketing and delivery team with a focus on our entry into the Chinese market and increasing our penetration into the US, EMEA and APAC.”
Alibaba, which was recently predicted by analyst MKM Partners to become the world’s first trillion-dollar Internet firm by 2020, has ramped up its foreign investment in recent months. Highlights include deals with Indonesia’s Tokopedia ($1.1bn) and Lazada ($1bn), BigBasket of India ($280m) and, earlier this month, Pakistani firm Daraz (undisclosed).
Its DAMO wing, which stands for “Discovery, Adventure, Momentum, Outlook” is also a Chinese play on “Dharma”, a monk from India who is widely thought to have exported Zen Buddhism to China in the 5th century AD. It aims to serve two billion customers and create 100m jobs by 2036.
“Through investing in SQream, we aim to bring the next generation of data analytics technology to empower growing enterprises worldwide,” said Chaoqun Zhan, Alibaba Database Business director. “SQream’s GPU database will provide Alibaba Cloud’s customers with reliable, scalable and on-demand access to large-scale data storage ranging from terabytes to petabytes. Alibaba Cloud customers will also gain unparalleled data access within a service that is both cost-effective and easy to activate.”
Israel, which despite its small size has one of the world’s best deep-tech startup ecosystems, presents a valuable opportunity for Alibaba, whose chairman Jack Ma first visited Israel last month. Ma, accompanied by 35 senior executives, met with 30 Israeli startups and visited prominent sites. “We will do more things here,” he concluded, adding that Israel was “inspirational.
“You don’t have any cars, but you have the best technology for car manufacturing,” Ma added. “You don’t have any diamonds, but you have one of the world’s largest diamond exchanges. You don’t have water, you don’t have oil, you don’t have any resources, still you make yourself so strong. In my mind, Israel represents, wisdom, innovation, and persistence.”
SQream CEO Gal sees Alibab’s investment as a “vote of confidence…from one of the world’s fastest-growing technology companies, the world’s fastest growing cloud provider, in one of the largest and fastest growing markets in the world.
“It’s a huge opportunity for us.”