Billion Dollar Unicorns: Tableau’s Valuation Increases to $6 Billion

No Billion Dollar Unicorn story can be complete without a discussion on data anlaytics start-up, Tableau Software (NYSE: DATA). Here is the story of how Christian Cabot started this capital efficient unicorn company.

Tableau’s Financials

Seattle-based Tableau Software was founded by Stanford alumni and professors, Christian Chabot, Chris Stolte, and Pat Hanrahan in 2003. This was Christian’s second entrepreneurial venture after he had successfully sold BeeLine Software within 18 months of setting it up.

Tableau came into being when the founders decided to address a problem pertaining to virtualization of structured data that they had encountered in their professional lives. Christian realized that while all data was ultimately being presented in the form of virtual charts and maps, the actual virtualization was the last step to data analysis. Only after the data points had been diced and pivoted did the user deploy a chart wizard at which point it was too late. Once the team knew the problem they were addressing, they leveraged domain expertise, licensed Polaris technology, and created Tableau Software.

Using Tableau’s analytic software, users are now able to create graphs for data queries using simple drag-and-drop actions. Soon the company started attracting customers and revenues. The company earned $34.2 million in revenues in 2010 and had grown that to $127.7 million by the year 2012. Tableau saw revenues grow 82% over the year to $232.4 million for fiscal 2013.

For the September ended quarter, Tableau’s revenues grew 71% over the year to $104.5 million, ahead of the Street’s target of $94.5 million. They ended the quarter with an EPS of $0.06 compared with analyst expectations of loss of $0.06 per share. For the December ended quarter, Tableau expects revenues of $118 million-$122 million, ahead of the Street’s forecast of $113.7 million.

Tableau’s Product Expansion

Tableau continues to upgrade their products that simplify data analytics. Last year, they announced the release of Tableau Drive, a self-service analytics methodology that uses the best practices from successful enterprise deployments. Tableau Drive delivers an iterative, agile method that is faster and more effective than traditional deployments.

They also expanded the support for Hadoop technologies by launching four new direct data connectors for IBM InfoSphere BigInsights, Amazon Elastic MapReduce, Spark SQL, and MarkLogic Enterprise NoSQLDatabase.

Tableau’s valuation has also expanded exponentially. They went public in 2013, but prior to that had raised a comparatively meager $15 million in funding from New Enterprise Associates. Their first round of funding was held in 2004 when they raised $5 million at a valuation of $20 million. They raised $172.8 million in 2013 when they went public at a valuation of $2 billion. Today their stock is trading at $86.98 with a market capitalization of $6 billion. It touched a high of $102.37 in February last year.

According to IDC, the global Big Data and analytics market is expected to be worth $125 billion in 2015. IDC estimates that visual data discovery, which is an important enabler of end user self-service, will grow 2.5 times faster than the rest of the market and will be a requirement of all enterprises by 2018. Tableau’s market opportunity remains immense, and as of now they seem to be making the right moves to capture it.

I love this story for the sheer execution savvy of the entrepreneur team: turning $15 million of capital into a $2 billion valuation, going public, and then sustaining the momentum with flawless execution to now increase the valuation to $6 billion.

More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.

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Photo: Mark Roy/Flickr.