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The rumors of an acquisition turned out to be true. Snowflake announced on Wednesday that it has agreed to acquire Neeva, a search startup founded by former Google executives, for an undisclosed amount.
The deal, announced during Snowflake’s quarterly earnings report, is expected to enhance Snowflake’s ability to offer intelligent and conversational search experiences to its customers who use its platform to store, analyze, and share data.
“Engaging with data through natural language is becoming popular with advancements in AI,” Chairman and CEO of Snowflake, Frank Slootman, said during a company earnings call.
“This will enable Snowflake users and application developers to build rich search-enabled and conversational experiences,” he added, “and we believe Neva will increase our opportunity to allow non-technical users to extract value from their data, more broadly.”
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Neeva shuts down its consumer search
Founded in 2019 by Sridhar Ramaswamy and Vivek Raghunathan, who both worked at Google’s advertising technology division, Neeva raised $77.5 million in funding prior to being acquired by Snowflake. Investors included Greylock Partners, Sequoia Capital and Ram Shriram, a board member of Alphabet, Google’s parent company.
Neeva initially aimed to create a subscription-based search engine that would respect users’ privacy and not show ads. In January, Ramaswamy wrote a guest post on VentureBeat that described how Neeva wanted to challenge Google’s monopoly on search and offer a better alternative for consumers. It’s an effort that ultimately did not work out.
Last week, Neeva announced it was shutting down its consumer search product and pivoting to focus on enterprise use cases of large language models (LLMs) and generative AI.
Neeva brings a conversational interface to Snowflake
Christian Kleinerman, Snowflake’s senior vice president of product, said during the earning call that the Neeva technology will help to bring a new type of experience to Snowflake users.
Kleinerman said that Snowflake is on a mission to extend its capabilities as it brings computation close to the data. Snowflake over the years has evolved into an application platform and a core use case for applications is for search enabled experiences. He noted that generative AI brings with it the notion of conversational experiences, which is where Neeva technology will fit in.
“The folks at Neeva are the ones that have the power to help us accelerate efforts around Snowflake as a platform for search and conversational experiences,”Kleinerman said. “But most important within the security perimeter of Snowflake, with the customers’ data so that they can leverage all these new innovations and technology, but with safety, privacy and security of the data.”
Snowflake’s view on AI
The acquisition of Neeva will fit into Snowflake’s strategy to help organizations benefit from LLMs and the power of generative AI.
“Generative AI as a style of interaction has captured the imagination of society at large and it will bring disruption, productivity as well as obsolescence to tasks and entire industries alike,” Slootman said.
Snowflake’s position is that generative AI requires data, which is what Snowflake has always been focussed on. Slootman noted that many generative AI models have been trained with internet or public data and his belief is that enterprises will benefit from customizing AI with their own data.
The acquisition of Neeva isn’t the first AI vendor that Snowflake has acquired. In August 2022, Snowflake acquired Applica, which is a startup that was building technology to help organizations use AI to gain insights from data.
“The Snowflake mission is to steadily demolish any and all limits to data users’ workloads, applications,” Slootman said. “New forms of artificial intelligence will therefore continue to see us evolve and expand our functions and feature sets.”
Snowflake reported revenue for the quarter was $623.6 million, representing 48% year-over-year growth. However, the company gave product revenue guidance for the second quarter that missed consensus estimates. Snowflake’s shares fell 12 percent in after-hours trading following the earnings report.
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