Breaking down Snowflake's massive IPO

Snowflake on Wednesday went public in the largest software IPO of all time, and then kept running like the Energizer Bunny on speed. By the time it was over, the company was worth over $80 billion.

Background: Snowflake was founded in 2012 to build data warehousing and analytics services for other businesses — audaciously seeking to both compete with Amazon while also building on top of it.

• It raised seed funding at a valuation south of $6 million, led by Sutter Hill Ventures. Sutter Hill's stake, including shares acquired in later rounds, was valued at around $12.5 billion at yesterday's market close.
• For context, the entire U.S. venture capital market raised only $25 billion in the year of Sutter Hill's initial investment.
• Snowflake's final VC round, just seven months ago, valued the company at $12.5 billion.

What happened yesterday: Applying logic or fundamentals analysis to tech stocks right now is a fool's errand, but two possible explanations for why Snowflake's debut stood out from the froth.

• Warren Buffett's halo: Berkshire Hathaway committed to buy $250 million of stock from the company, concurrent to the IPO, and another 4 million shares from insiders ($480m at IPO price). Not only was it Berkshire's first IPO play since Ford Motor Company and first-ever tech IPO investment, but it also was because money-hemorrhaging Snowflake seemed to clash with Buffett's typical investing gospel.
• The *other* Oracle: Many investors are desperately seeking the next tech whale, having already exposed to the hilt on FAANG. So why not follow the crowd like they've done so successfully before, particularly if they feel that one of Snowflake's most formidable rivals is preoccupied with TikTok?

What's happening: Snowflake shares melted a bit at the open, and as of this writing are down around 10% to $226 per share (the IPO price was $120 per share).

What to watch: Tomorrow's listing for gaming company Unity Software. Not because it competes with Snowflake, but because it's utilizing a new online bidding process that's designed to find the most efficient IPO price.

• If successful, this could be a game-changer, given that Snowflake arguably left more than $3.5 billion on the table yesterday via the "pop."
• Both Snowflake and Unity share a lead IPO manager, Goldman Sachs.

Go deeper: Axios' Kia Kokalitcheva goes deeper with early Snowflake investors