- Warren Buffett’s Berkshire Hathaway is set to invest more than $550 million in Snowflake when it goes public, according to the cloud-data group’s amended S-1 filing.
- The billionaire investor’s company will buy about 3.1 million Class A shares in a private placement, and purchase another 4 million shares from former Snowflake CEO Robert Muglia.
- Salesforce’s strategic venture arm has also agreed to invest $250 million in Snowflake stock.
- Berkshire’s bet is striking as Buffett has historically stuck to companies he understands, and joins a string of unusual moves from Berkshire, such as investing in a gold miner and acquiring 5% stakes in five Japanese trading companies.
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Warren Buffett’s Berkshire Hathaway has agreed to invest $250 million in Snowflake when it goes public in the coming weeks, according to the cloud-data company’s amended S-1 filing.
The famed investor’s conglomerate will purchase roughly 3.1 million Class A shares in a private placement, based on the $80 midpoint of Snowflake’s expected IPO price range of $75 to $85.
Buffett’s company has also agreed to buy another 4 million Class A shares from former Snowflake CEO Robert Muglia in a secondary transaction, paying the IPO price for each share. That could cost it $303 million to $344 million based on the expected price range.
If both purchases go through, Berkshire might spend upwards of $550 million for more than 7 million shares, representing about 19% of the 38.3 million Class A shares that Snowflake expects to be outstanding after its offering.
Salesforce has also agreed to purchase $250 million of Snowflake stock through its strategic venture arm, Salesforce Ventures, the filing shows.
Snowflake declined to comment in an email to Business Insider.
Berkshire’s latest bet is striking as Buffett famously eschews tech stocks, preferring to invest in businesses he understands. It joins a flurry of surprising moves from his company, including its first investment in a gold miner and deep cuts to its stakes in JPMorgan, Wells Fargo, and other financial companies last quarter.
Buffett’s company also disclosed 5% stakes in the five biggest Japanese trading companies or “sogo shosha” last week, and bought $2.1 billion of Bank of America stock over 12 straight trading days to August 4.
Snowflake was founded in 2012 and privately valued at $12.4 billion in February. Its revenues surged 121% year-on-year to $133 million in the the three months to July 31, helping to narrow its operating loss by 19% to $78 million.