In this interview, Amr Awadallah, CTO of Cloudera, explains the role of In‑Q‑Tel—a venture‑capital firm founded by the CIA—to invest in technologies that aid U.S. intelligence and defense agencies. He describes how In‑Q‑Tel introduced Cloudera to federal customers, leading to significant government contracts that now represent a major revenue stream for the company. Awadallah addresses privacy concerns, likening Cloudera’s big‑data platform to a gun that can be used for good but may be misused, and notes the safeguards built into the product. The conversation shifts to Cloudera’s valuation, with Awadallah stating that the company’s market potential far exceeds its $4.1 billion valuation and that the goal is to become an enterprise‑software giant comparable to Oracle. Finally, he offers nuanced advice on venture‑capital fundraising: startups should assess profitability, growth needs, and dilution risk before taking money, and only accept capital on terms that preserve control and align with the business model.
Chapters
One thing that's really interesting about Cloudera, one of the many things, is they have funding from In-Q-Tel. Does anybody know who In-Q-Tel is?
No.
It's a strategic investing firm. They're based in Arlington, Virginia, but they have an office out here in Silicon Valley. And they were set up in 1999 by the CIA. And the CIA said, we need better technology, Silicon Valley is making it, you guys are going to go invest and find this technology. And In-Q-Tel is still around and they're actually going to start investing for— on behalf of the Pentagon as well. So the intelligence community saw Cloudera and said we can use that technology. And they also did that with Palantir, which is another, as you guys probably know, big data, really successful company under Peter Thiel. But I'd love to hear how you think you got the intelligence community's attention and also what was it like making a deal with the federal government, with the CIA, in order to sell your software to them. And I know you're working through In-Q-Tel to do that, but it's a much different scenario, I would imagine, than selling to an industry or a retail company or something like that.
Yeah, so In-Q-Tel essentially is a VC firm. They are a VC firm. They're funded by the CIA and the government, but they are a VC firm. And what they focus on is technologies that can help with the mission, the mission of the federal— these 3-letter federal agencies, which is catching bad guys. Any technology that helps catching bad guys, they want to help foster and grow because they want to bet on the future that we need to get better and better at doing that. So in our case, In-Q-Tel obviously heard about our technology and how it really helps with that mission, and they invested in the company. Now that's completely separate though than the government itself coming on later on and buying from us, which also happened in this case. In-Q-Tel would help make the meetings and make the introductions, but still these different groups, they make their own assessment. So for us, obviously, we looked at this technology and how it can really help with furthering that mission of catching bad guys and catching bad events or bad terrorist acts before they happen. And obviously when they came to us, it made sense both ways. Now there's lots of controversy obviously out there about how much data to be collected and the privacy. of citizens and so on. My response to that also always to say our technology is more like the gun. We're making the gun, which is this very powerful big data platform, but our intentions is the gun should be used for good, right? And we put a lot of checks and systems in there to make sure it cannot be abused. That said, unfortunately it might sometimes get abused. That's not our fault. So please don't fault us for that.
Mm-hmm. It's just interesting to learn that sometimes the federal government can also be a good customer for entrepreneurs and startups, even though we often think of like red tape and antiquated systems and really bad legacy technology. I think there are opportunities out there.
Oh, no, no, very much so. I mean, government is one of our biggest revenue streams right now, so yeah.
Okay, great. So let's go back to a little bit about the billion dollars that Code.org has raised. Now valued at $4.1 billion, which ranks you about 19th most valued VC-backed company in the world. I think you just lost 18th place to Zenefits last week, but still not too shabby. Do you think that it's— $4.1 billion is a reasonable and accurate valuation of your company?
Oh.
Of course.
It's a very good question. So I have to be careful how I answer that question because obviously our goal at Cloudera eventually is to go public, to be a public company. And when you're on that path, you have to be very careful what you say for potential public investors that might be investing in you. What I can tell you from my perspective, the founders of the company, we always thought this is a major, major opportunity. We're building the foundation of what would become the next system for storing and managing data across the world. So we think the opportunity is huge, huge. I cannot put— I'm not going to put a number on it, but I think it's way bigger than that. That's what we're shooting for. We're shooting for building a company that's going to be as big as Oracle and other very well-established enterprise software companies.
I guess there's so much money out there to be raised these days and we're all hearing about these monster fundraising rounds. I mean, Uber is now in talks to raise $1.5 to $2 billion. Other lesser-known companies are raising $200, $400, $500 million in these rounds. Do you have any recommendations or guidance as to if these guys get out there and the funding is still like that and they've got investors who are willing to give them money, should you always take it even if you don't need it right away in anticipation that one day— There might just not be anybody who wants to give you money. Should you always take it? How do you keep your head on straight in this type of environment?
Yeah, so it depends on your business model, right? So if you're already a company that is profitable and you're able to scale that profit, meaning you have enough money coming in from that profit to expand your business, then no, you actually don't need to take the money. So I wouldn't say the answer is always take the money. It should depend on your situation. If you're building a company that clearly will be profitable in the future, because you have a subscription business and the more subscribers you have over time, you will be profitable, but you want to grow your subscriber base and you need a lot of money right now to do a lot of advertising or hire lots of salespeople, then you should take the money. If you're still not profitable and you're burning lots of cash, you should take the money because you don't know if a dark day will come where there will be a long time before you are able to raise money again. So I think it always depends on the—
The situation.
What you want to optimize for is take the money under terms that make sense, right? You don't want to just take the money and, for example, an investor comes in and says, hey, I'm going to buy 90% of the company, and now you lose complete control. You would only do that in a very, very desperate case where the business is about to run out of money, for example, and you want to avoid that. So the answer is it depends. It depends on the circumstance that you're in.
