Software company Snowflake has moved its executive office from San Mateo to Bozeman, Montana, becoming the latest tech company to relocate part of its operations from the Bay Area.
San Mateo Mayor Eric Rodriguez believed the Snowflake decision would not affect the local economy immediately.
“As far as I can tell, they have indicated that they plan to keep a large part of their operations still in San Mateo. I think it’s important to keep the announcement in perspective because, in the short term, I do not anticipate the decision to have a practical impact on our local economy,” Rodriguez said.
A Snowflake spokesperson said in a statement that Snowflake was a Delaware corporation with no corporate headquarters and a global workforce.
“Under the Securities and Exchange Commission’s rules, we are required to designate a ‘principal executive office.’ For this purpose, we have designated our office in Bozeman, Montana as our principal executive office, as that is where our chief executive officer and chief financial officer are based.
While San Mateo continues to remain an important location for us, we do not have a single office that is at the center of Snowflake’s operations. We will continue to concentrate hiring in specific regions that optimize for talent pool, growth, cost, access to universities, technical talent, and other factors.”
Snowflake is a cloud-based data warehousing startup founded in San Mateo in 2012 by Marcin Zukowski, Benoit Dageville and Thierry Cruanes. Since its founding nine years ago, the company has grown from a small startup to a company that raised $263 million in January 2018 and now employs hundreds of people. The company made its initial public offering in 2020. Salesforce, a Bay Area cloud company, and Warren Buffett’s Berkshire Hathaway each bought $250 million in Snowflake stock in private placements following the IPO. Snowflake still maintains an office on Concar Drive, which it stated remains an important location. Customers include startups that use Snowflake’s data infrastructure on the cloud to more established companies moving data. Snowflake’s customers include credit card companies and media and entertainment enterprises.
Several large companies and businesses in the Bay Area have recently decamped to other states. Oracle in December announced it was moving its corporate headquarters out of Redwood City to Austin. Hewlett-Packard announced last year it was moving headquarters from San Jose to Houston. Venture capitalist Tim Draper, founder of Draper University based in San Mateo, recently announced he was considering moving to Austin.
Rodriguez believes Snowflake enjoyed being in the city and was part of the community. However, he noted the Bay Area did have an astronomical cost of living, especially with housing and child care, high state tax rates and not as friendly business environment when compared to Austin, Denver or Bozeman.
“I am concerned about the underlying factors that are driving successful companies elsewhere,” Rodriguez said.
He noted many companies are likely looking at if it makes sense to stay in California, and while many would stay, others would unfortunately leave. Rodriguez is a business owner and didn’t think California’s top priority at the moment was keeping business in the state, with more focus on things like the cost of living. He noted the Bay Area was an expensive region to live in and a challenging environment for welcoming businesses.
“I think as we see more and more companies leave, it’s eventually going to end up hurting the state’s tax revenue. Until we start feeling that pain and recognizing that we need more policies that are designed to keep businesses here, I think we are going to continue to see this trend,” Rodriguez said.
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