Why VCs Will Continue to Invest in Big Data Startups for Many Years to Come

​By Jeremy Sutter, Business Writer

During the late 1990s, also commonly referred to as the dot-com era, it seemed all one had to do was have an office in San Francisco or Silicon Valley and have an idea for a website that would bring people together for an investor to throw money at it. Then came 2001 and the bottom fell out. Interestingly, the same hot trend of looking for the next big startup continues to keep charging on, but without all the fanfare and definitely without all the after-hour parties. 

Two things appear to be driving VC activity, particularly in the realm of extremely new, unheard of startups: the rise of managing and harnessing value from big data, and the demand for new ideas on how to design data infrastructure. Both are technical enough to filter out the fly-by-night chatter; only startups who truly have the engineering or data management background are going to get out of the starting gate with a viable product in these two fields. 

So startups are also coming up with new and previously unheard of ideas of how to move electronic data physically as well as digitally. Both scalability as well as speed matter tremendously and these new players are going places were tried and true systems can’t touch because they are locked into existing system protocols and paradigms. That makes for market disruption on a big scale.

The market’s need for new database architecture has also influenced what VC firms are looking at for their next investment opportunities. They are recognizing the need for solutions that meet scalability demands as wells as run more efficiently without bogging down a network. Operating cost is a big factor as well, so those with ideas on how to do more with less are also getting VC attention. 

Read the whole article on TradeUp Blog.